(NEXSTAR) – Fall brought a glimmer of hope for home shoppers this year, as the number of buyer’s markets in major U.S. cities continues to grow as mortgage rates retreat slightly, according to Zillow.
The average 30-year fixed mortgage rate, which was above 7% at the start of the year, slipped below 6.3% in October, which Zillow says contributed to a 5% annual jump in new listings and pending sales.
Meantime, the median home price increased by 2.9% year-over-year in Oct., the slowest rate since 2012, according to Redfin.
While still high, home prices fell enough this fall to add multiple major U.S. cities to Zillow’s list of buyer’s markets, or places where there are more homes listed than there are people looking to buy.
List of buyers’ markets grows
Zillow’s October list has nine new markets year over year, with an additional three since Sept. alone (Cincinnati, Birmingham and Milwaukee). See the top 19 major markets for home buyers below, in order of most to least favorable:
- Miami, FL
- Indianapolis, IN
- Milwaukee, WI
- Pittsburgh, PA
- New Orleans, LA
- Louisville, KY
- Jacksonville, FL
- Austin, TX
- Memphis, TN
- Detroit, MI
- Nashville, TN
- Tampa, FL
- Seattle, WA
- Atlanta, GA
- Houston, TX
- Charlotte, NC
- San Antonio, TX
- Birmingham, AL
- Cincinnati, OH
Even in a so-called buyer’s market, prices are still prohibitively expensive for many people, especially first-time shoppers.
“The biggest struggle first-time buyers have is finding an affordable property, and many of them struggle to save for a down payment,” said Jessica Lautz, National Association of Realtors deputy chief economist and vice president of research, in a news release. “The biggest source of pain that they are citing is high rent and student loan debt.”
Only 4 large cities saw an increase in the average home value from September to November: San Jose (.4%), New York (.4%), San Francisco (.1%), Salt Lake City (.1%)
The year’s biggest gainers, losers
Year over year, the largest gains were recorded in Cleveland (4.5%), Hartford (4.4%), Milwaukee (4%), Buffalo (3.7%) and Chicago (3.7%), according to Zillow, with the greatest declines in Austin (-6.1%), Tampa (-6.1%), Miami (-4.8%), Orlando (-4.6%) and Dallas (-4%).
Zillow analysts found that the typical mortgage payment in October is down 1.8% from last year … but still 99.3% higher than before the pandemic.
As for the year ahead, the National Association of Realtors (NAR) projects rates to to stay around 6%.
“As we go into next year, the mortgage rate will be a little bit better,” said NAR Chief Economist Lawrence Yun. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.”