According to data published today by an independent consulting firm Parcl Labs, home valuations, both new and existing, in the world's largest economy, fell by 1.4% in the last three months compared to the same period in 2024. This would mark its first devaluation in over two years. The most significant declines occurred in Texas cities such as Austin and Houston, with devaluations of 10% and 4%, or in Denver (5%), Atlanta and Phoenix (both 3%). "Recently, we have observed a period of weakening in the national housing market following the rapid boom experienced during the COVID-19 pandemic years, from 2020 to 2022," Jason Lewris, co-founder of Parcl Labs, told CNBC. Home prices had not fallen since mid-2023, a year after the Fed decided to raise interest rates from 0%, which led to a sharp increase in mortgage rates. Lewris indicated that this latter factor "provoked an affordability crisis: many buyers were excluded from the market, sales volume decreased, and sellers had to adjust their expectations". "Historically, this combination of a credit or affordability crisis, lower demand, and an excess supply that the market cannot easily absorb usually leads to widespread price declines at the national level," he added. Lewris pointed out that they foresee a scenario in the coming months where prices will hover around zero with small annual variations, either up or down. "The magnitude of these fluctuations will depend mainly on mortgage rates (which have barely moved recently) and the overall health of the economy," he added.
