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By Giulia Carbonaro
Senior Reporter
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Home values have fallen month-over-month in more than 60 percent of U.S. counties in April, according to data from real estate platform Reventure App—a decline so widespread that it can only be compared to those that followed the 2008 housing market crash and the 2022 mortgage rate spike, the company's CEO Nick Gerli said.
"More than half the country is now officially in month-over-month declines, indicating that the housing downturn is spreading," the real estate analyst wrote on X.
"We'll have to see if this lasts into the future, and if it turns into a sustained correction like 2008 or is a blip like 2022. But given the trajectory of listings and inventory, it seems like more value declines are coming," he said.
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Why It Matters
For years now, home prices have been rising across the U.S, pushed by chronically low levels of inventory and pent-up demand. The homebuying frenzy that characterized the pandemic years, triggered by historically low mortgage rates, accelerated home prices' vertiginous growth, driving the market to new levels of unaffordability for buyers.
Now, the U.S. housing market appears to be at a breaking point: many prospective buyers have been pushed to the sidelines by high mortgage rates and rising housing costs, and while inventory levels are rising, not enough people seem to be able to afford or be willing to venture into the purchase of a home.
Dwindling sales and rising inventory are putting downward pressure on prices, in a move that would certainly benefit prospective homebuyers. Sellers, however, could see the value of their assets drop significantly from their pandemic peaks.
What To Know
Gerli warned that one month of data is not enough to judge the direction the U.S. housing market is headed toward. However, he said, "to see 60 percent + of U.S. counties recording a decline on Zillow's home value index suggests something big could be happening."
The last time so many counties across the U.S. saw significant month-over-month home values decline was in September 2022, when 77 percent of U.S. counties reported drops.
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"This was right after the Fed raised interest rates, and there was a short-term dislocation in the market where sellers panicked and cut prices, because they feared an economic recession was imminent," Gerli said.
Those declines, however, were a false alarm. "That recession didn't happen, and prices bounced back," the real estate analyst added.
Back in 2008, however, widespread home value declines across the country were a signal of a much worse downturn. Starting from April of that year, more than 60 percent of U.S. counties reported month-over-month declines for almost four years in a row, Gerli said.
Home prices were still rising year-over-year at the national level in April, according to Redfin data, with the median sale price of a typical home at $437,864, up 1.3 percent from April 2024. However, Redfin now expects persistent affordability issues and rising inventory to bring down home prices by 1 percent by the end of 2025.
What People Are Saying
Gerli said of the month-over-month decline in a majority of U.S. counties: "Breadth is important in terms of analyzing the housing market, because it shows that there is contagion occurring, and if more than a handful of markets are being affected. For a while, in 2024, it was only Florida and Texas trending down. Now it's more than half the U.S."
Redfin wrote in a recent report: "The U.S. housing market has been lackluster since mortgage rates rose sharply at the start of 2022, and has slowed further in the last several months due to widespread economic instability and stubbornly high housing costs. More homes for sale, combined with fewer people interested in buying them, is expected to push U.S. sale prices down."
What Happens Next
According to Gerli, inventory levels suggest that the U.S. housing market could now be in a more similar situation to that of 2008 than 2022. According to a recent report by Redfin, there is currently a massive imbalance between sellers and buyers in the U.S. housing market, the first outnumbering the latter by 500,000.
"We haven't seen anything like that since the mid-2010s," Gerli said.
Back in 2022, inventory levels were still near record lows across the country, and prices could only drop that far. Now, they have much more room to fall.
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