The three major US cities where median home prices fell the most in July

Median home prices in the US finally fell last month, according to a new report.

Of the 50 largest metros, 47 saw reductions from this time last year - with three in particular leading the way, Realtor.com reported.

The cities, located in Florida, North Carolina, and Phoenix, have seen home prices drop by as much as $100,000.

The decreases contrast the price hikes seen during the pandemic, when mass migration threw city housing markets for a loop.

Markets in several of these hubs are now growing cold, data show, as experts point in part to high mortgage rates. 

The biggest reductions in home prices were seen in Tampa, Charlotte, and Phoenix.

Of the US's 50 largest metros, 47 saw reductions from this time last year, a recent report found - with three in particular leading the way. Tampa, which saw the biggest price drop, is here

'Rates remain higher than expected, which means there is less buyer activity,' Realtor.com senior economist Ralph McLaughlin said.

'Second, the prospect of lower mortgage rates coming this fall may have induced some buyers to wait.

'This combo has led sellers to lower their prices in order to attract more buyers.' 

Of the locations where this phenomenon is being felt the most, McLaughlin said: 'These are places where sellers have had a good run over the past few years with rising prices, but with the effects of higher rates fully settling in, sellers are having to come back down to earth with their price expectations,' he said. 

The Federal Reserve signaled that a rate cut could be in the cards come September as inflation continues to cool.

In the interim, as mortgage rates remain high, sellers are set to suffer, according to experts interviewed by Realtor.com said, while prospective buyers reap the benefits.

This is already being seen in places like Tampa, where a five-bedroom, three-bathroom house, priced at $664,000 back in February, has since been reduced by $119,000.

In Tampa, a five-bedroom, three-bathroom house that was priced at $664,000 in February is now for sale for $545,000

The home's price was reduced seven times, including one to the tune of $33,000 on July 31.

The 2,624-square-foot home is now selling for $545,000, Realtor.com found.

The report put the Gulf Coast city's overall reduction in price at 9.7 percent - meaning a home that would cost a half million dollars a year ago would be priced around $450,000 today.

The next biggest price reduction was recorded in Charlotte, where a three-bedroom, 2.5-bathroom home originally listed for $339,990 on July 23 is already down to $324,900.

Realtor.com recorded the price drop in the city at 9.5 percent from this time last year.

In Charlotte, Realtor.com recorded the price reduction at 9.5 percent from this time last year 

In Charlotte, a three-bedroom, 2.5-bathroom home originally listed for $339,990 on July 23 is already down to $324,900

Phoenix, with one of the fastest growing populations of any U.S. city, recorded a 9.4 percent drop in median home price from last year, Realtor.com found.  

A three-bedroom, two-bathroom home listed at the start of the year for $520,000 is now going for $495,000 after four price cuts, with the latest coming on July 19.

Mortgage rates spiked over the course of just 16 months in 2022 and 2023 - the result of an aggressive campaign by the Fed to address then rampant inflation. 

Within that span, the bank signed off on 11 increases - the fastest pace of tightening in decades.   

Phoenix, with one of the fastest growing populations of any U.S. city, recorded a 9.4 percent drop in median home price from last year, Realtor.com found 

A three-bedroom, two-bathroom home listed at the start of the year for $520,000 is now going for $495,000 after four price cuts, with the latest coming on July 19 

Experts have credited the rate hikes with creating a 'golden handcuff' effect in the housing market, leaving sellers who locked in lower rates hesitant to sell.

That left limited supply and less options for buyers, though Realtor.com suggests that even a minor change in rates can drastically swing the median price.

Federal Reserve Chair Jerome Powell on Wednesday forecast last week interest rates could be cut as soon as September.