How much have home prices fallen? As with most things in real estate, the key is location, lꦐocation, location. 

Prices for single-family homes have fallen 2.2% on average since their peak in July, accordi🅘ng to the Moody’s Analytics Houജse Price Index released last week. The downturn hasn’t been shared equally: homes in many East Coast cities and states with cheaper houses have mostly maintained their value, while some pricey West Coast metro areas have experienced double-digit drops. 

Home values soared during the pandemic era’s ultra-low mortgage r🎉ates and hi🐬gh demand for space for remote work. Since then, values have suffered something of a hangover since peaking last summer. 

Mortgage rates have risen as a consequence of the Federal Reserv꧟e’s anti-inflation interest rate hikes, pricing many would-be buyers out of the mar🐻ket and driving down demand. 

The average rate offered for a 30-year mortgage has doubled since 2022 began, and stood at 6.43% last week, according to mortgage giant Freddie Mac. Surging prices during the pandemic combined with higher interest rates have pushed the typical monthly mortgage payment on a newly-purchased home to $2,060, up from $1,204 before the pandemic hit, according to dat💮a from the Mortgage Bankers Association. 

“The U.S. housing market is struggling to find its footing as low affordability undermines demand,” economists at Moody’s Analytics wrote in a commentary. "The most expensive segment of the market is being hit the hardest, and the sharpest declines are concentrated in unaffordable and overvalued West Coast markets."

Indeed, home prices have taken the biggest beating in some of the country’s least affordable markets. Home prices in the metro area of San Francisco, where a single-family home goes for $1.4 million on average according to data from real estate website Redfin, have fallen 13.16% from their peak according to Moo♈dy’s.