Listing prices per square foot dropped year over year in 36 of the 50 largest U.S. metro areas in August, with Austin, Tampa, and Memphis leading the slide, a correction driven by high mortgage rates and a flood of inventory in cities that overheated during the pandemic.
Nationwide, the median list price per square foot fell 1.8% compared with a year earlier, marking the tenth consecutive monthly decline, Fox Business reported, citing a Realtor.com analysis of August housing data. Three of the four major U.S. regions posted year-over-year drops: the Northeast fell 3.6%, the South 2.6%, and the West 2.1%. Only the Midwest held flat.
The pattern is clear enough. Markets that saw the wildest price spikes between 2020 and 2022 are now handing those gains back, and buyers still face mortgage rates high enough to keep many of them on the sidelines.
Austin posted the steepest decline of any major metro, with list price per square foot falling 8.1% year over year in August. Tampa followed at 5.6%, and Memphis rounded out the top three at 4.1%.
San Francisco ranked fourth nationally, down 3.9%. But the story there is more complicated than a simple price collapse. The city's median listing price sat at $908,700, still down 5.2% from a year ago, while active listings dropped 16.3% in July compared with the prior year.
Jake Krimmel, a senior economist at Realtor.com, said the San Francisco numbers reflect a shift in what kind of homes are hitting the market, not a broad loss of value:
"It's not about San Francisco homes losing value, but rather how expensive the available inventory is this year relative to last."
Krimmel explained that fewer small, expensive homes in the city center are available, those sell fast, while more large, lower-cost-per-square-foot properties in the outer suburbs are coming to market. That mix shift pulls the per-square-foot average down even if individual homes are not necessarily cheaper.
Beyond the top four, the list of cities shedding value reads like a roster of Sun Belt and western metros that attracted remote workers and out-of-state buyers during the pandemic. San Antonio fell 3.6%. Denver dropped 3.4%. Baltimore declined 3.2%. San Diego lost 2.7%, Orlando 2.6%, and Portland, Oregon, 2.4%.
Krimmel tied these declines to a common cause:
"One common thread for most markets, including Austin, Tampa, San Antonio, Denver, is 2020-22 boomtowns continuing to give back some of their pandemic-era gains. These are also, by and large, places with much more inventory now than pre-pandemic norms."
That inventory glut matters. When supply outpaces demand, especially in markets where buyers already struggle with affordability, sellers cut prices. And with mortgage rates still elevated, fewer buyers can absorb even discounted listings.
Not every city is losing ground. Providence, Rhode Island, posted the largest gain among major metros, with list price per square foot climbing 9.3% year over year. Indianapolis rose 4.4%, and Chicago gained 3.6%.
Those three markets share a trait the declining cities do not: they never saw the same runaway appreciation during the pandemic. Prices that did not spike as hard have less room to fall.
The broader picture is one of a housing market caught between stubborn mortgage rates and prices that, despite ten months of decline, remain far above pre-pandemic levels in most cities. Falling list prices sound like relief for buyers, but the drop is modest against the run-up that preceded it. An 8.1% decline in Austin does not erase a boom that doubled or tripled values in some neighborhoods between 2020 and 2022.
High rates compound the problem. Buyers who locked in low rates years ago have little incentive to sell and take on a new, more expensive mortgage. That keeps existing-home inventory tight in some markets even as new listings grow in others.
The result is a market that punishes almost everyone except cash buyers and investors. Sellers in boomtown metros watch their equity shrink. First-time buyers face monthly payments that remain out of reach. And the national headline, prices down 1.8%, masks wide regional variation that leaves some families far worse off than others.
Washington spent years flooding the economy with cheap money and then acted surprised when housing prices went haywire. Now ordinary families are paying the tab, in monthly payments they can barely afford, or in home values that are melting away beneath them.