The home price correction is spreading—this interactive map shows if your local housing market is impacted

Lance Lambert

<p>Pressurized. That might be the best word to describe the current U.S. housing market. Record home price appreciation—<a rel="noreferrer noopener" href="https://fred.stlouisfed.org/series/CSUSHPINSA" target="_blank">up 43% during the pandemic</a>—coupled with <a rel="noreferrer noopener" href="https://fortune.com/2022/06/15/mortgage-rates-spike-housing-market-real-cost-to-buy-a-home-jumps-50-percent/" target="_blank">6% mortgage rates</a> is sidelining millions of potential homebuyers. The combination puts debt-to-income ratios for new buyers <a rel="noreferrer noopener" href="https://fortune.com/2022/04/24/the-housing-market-might-be-headed-for-another-housing-bubble-says-real-estate-economist/" target="_blank">on par with levels hit during the peak of the housing bubble</a>.</p><div class="paywall-selector"></div><div class="paywall">



<p>That <a rel="noreferrer noopener" href="https://fortune.com/2022/07/02/housing-market-housing-bubble-requires-three-elements-the-us-has-hit-two/" target="_blank">affordability crunch</a> has already <a rel="noreferrer noopener" href="https://fortune.com/2022/08/31/housing-market-recession-to-be-even-bigger-in-2023-forecast-goldman-sachs/" target="_blank">pushed the U.S. housing market into a housing downturn</a>. <a href="https://fred.stlouisfed.org/series/EXHOSLUSM495S" target="_blank" rel="noreferrer noopener">Home sales are tanking</a>. Homebuilders are calling off projects. And <a href="https://fortune.com/2022/06/14/housing-market-correction-prices-mortgage-rates-interactive-map/" target="_blank" rel="noreferrer noopener">real estate firms are turning to layoffs</a>.</p>



<p>While it&#8217;s clear this ongoing housing downturn—<a rel="noreferrer noopener" href="https://fortune.com/2022/07/08/housing-market-reset-by-the-federal-reserve-is-working-2023-2022-housing-prediction/" target="_blank">spurred by the Fed&#8217;s inflation fight</a>—will see a sharp decline in housing activity, it&#8217;s less clear how it will impact home prices. </p>



<p>To better understand what&#8217;s going on with home prices, <em>Fortune</em> looked at monthly home values as measured by the <a href="https://fortune.com/company/zillow-group/" target="_blank">Zillow</a> Home Value Index&nbsp;(ZHVI). In total, we looked at data for 896 regional U.S. housing markets.</p>



<p>Let&#8217;s take a look at the Zillow data.</p>



<figure class="wp-block-embed is-type-rich is-provider-datawrapper wp-block-embed-datawrapper"><div class="wp-block-embed__wrapper">
<iframe title="Shift in home values between May 2022 and August 2022" aria-label="Map" id="datawrapper-chart-jwf1m" src="https://datawrapper.dwcdn.net/jwf1m/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="503" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>
</div></figure>



<p>Back in May, <a rel="noreferrer noopener" href="https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/" target="_blank">Moody's Analytics chief economist Mark Zandi made a bold proclamation</a>: The housing market would soon enter a home price correction. So far, he looks right. Among the 896 major regional housing markets tracked by Zillow, 117 markets saw home values fall between May 2022 and August 2022.  </p>



<p>The housing markets getting hit the hardest by the home price correction fall into one of two groups.</p>



<p>The first group&nbsp;includes&nbsp;<a rel="noreferrer noopener" href="https://fortune.com/2022/08/16/bubbly-housing-markets-are-shifting-historically-fast-austin-boise-las-vegas/" target="_blank">bubbly markets</a>&nbsp;like Austin (down 7.4%), Boise (down 5.3%), Denver (down 4.3%), Las Vegas (down 2.3%), and Phoenix (down 4.4%). Those markets saw deep-pocketed buyers from cities like San Jose and Seattle drive up prices far beyond <a rel="noreferrer noopener" href="https://fortune.com/2022/09/13/210-housing-markets-at-risk-of-15-to-20-home-price-declines-says-moodys-housing-crash/" target="_blank">what local incomes would historically support</a>. Those booms fizzled out once spiking mortgage rates sidelined even the affluent out-of-town buyers. That's why markets like Boise and Austin are now teetering on full-blown housing busts.</p>



<p>But the biggest price declines aren't in bubbly markets. Indeed, the biggest drops in home values can be found in high-cost tech hubs like San Francisco (down 7.8%) and San Jose (down 10.6%). Those markets got hit by a double whammy. Not only are their high-end real estate markets more rate-sensitive, but so are their tech sectors.</p>



<figure class="wp-block-embed is-type-rich is-provider-datawrapper wp-block-embed-datawrapper"><div class="wp-block-embed__wrapper">
<iframe title="Shift in home values between August 2021 and August 2022" aria-label="Map" id="datawrapper-chart-hF56A" src="https://datawrapper.dwcdn.net/hF56A/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="503" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>
</div></figure>



<p>There's no doubt about it: <a rel="noreferrer noopener" href="https://fortune.com/2022/04/20/soaring-mortgage-rates-could-cool-the-housing-market-some-by-summer-2022/" target="_blank">Spiking mortgage rates</a> are putting downward pressure on home prices. However, <a rel="noreferrer noopener" href="https://fortune.com/2022/09/04/housing-market-map-home-price-cuts-redfin/" target="_blank">the ongoing home price correction</a> has done little so far to chip away at the Pandemic Housing Boom gains. </p>



<p>In fact, just Boise and Fairbanks posted year-over-year home value declines between August 2021 and August 2022. </p>



<figure class="wp-block-embed is-type-rich is-provider-datawrapper wp-block-embed-datawrapper"><div class="wp-block-embed__wrapper">
<iframe title="Shift in home values between March 2020 and August 2022" aria-label="Map" id="datawrapper-chart-r0xs0" src="https://datawrapper.dwcdn.net/r0xs0/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="522" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>
</div></figure>



<p>If one zooms out even further, the 2022 price drops in markets like Boise look even smaller—at least relative to the gains we've seen during the Pandemic Housing Boom. After the 5.3% price drop in Boise this summer is accounted for, home values in the market are still up 48.6% since March 2020.</p>



<p>But we could still see more <a rel="noreferrer noopener" href="https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/" target="_blank">Pandemic Housing Boom</a> gains erased.</p>



<p>Research firms like <a rel="noreferrer noopener" href="https://fortune.com/2022/08/01/housing-markets-where-home-prices-fall-and-rise-2023-2024-housing-forecast/" target="_blank">Moody's Analytics</a>, <a rel="noreferrer noopener" href="https://twitter.com/AliWolfEcon/status/1559355418534506496?s=20&amp;t=F_FqzoD4DLrXuqm65d-PMA" target="_blank">Zonda</a>, <a rel="noreferrer noopener" href="https://fortune.com/2022/09/11/housing-market-home-prices-falling-in-these-98-housing-markets/" target="_blank">John Burns Real Estate Consulting</a>, <a rel="noreferrer noopener" href="https://economics.td.com/us-florida-housingmarket?linkId=179616788" target="_blank">TD Bank</a>, and <a rel="noreferrer noopener" href="https://fortune.com/2022/09/06/home-price-forecast-prediction-2023-2024-ivy-zelman-housing-market/" target="_blank">Zelman &amp; Associates</a> expect the home price correction to continue spreading across the country. Bubbly markets across the Sunbelt, in particular, remain at the highest risk.</p>



<p>“The longer that [mortgage] rates stay elevated, our view is that housing is going to continue to feel it and have this reset mode. And the affordability resetting mechanism right now that has to happen is on [home] prices. And so there are a lot of markets across the country where we’re forecasting that home prices are going to fall double digits,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells <em>Fortune</em>.</p>



<p>Want to stay updated on the U.S. housing market downturn? Follow me on&nbsp;<a rel="noreferrer noopener" href="https://fortune.com/company/twitter" target="_blank">Twitter</a>&nbsp;at&nbsp;<a rel="noreferrer noopener" href="https://twitter.com/NewsLambert" target="_blank">@NewsLambert</a>.</p></div>

Zillow: Home values fell in these 117 markets between May 2022 and August 2022.

This interactive map shows if your local housing market is impacted by the price correction

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