More Than Half Of U.S. Homes Lost Value Over The Past Year, The Highest Share Since 2012, New Data Shows. 'Homeowners May Feel Rattled'

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More than half of U.S. homes have lost value in the past year, according to new data from Zillow (NASDAQ:Z, ZG)), marking the highest share of declines since the housing crash era of 2012. For many homeowners, that drop might feel personal.

“Homeowners may feel rattled when they see their Zestimate drop, and it’s more common in today’s cooler market environment than in recent years,” said Zillow Senior Economic Researcher Treh Manhertz. “But relatively few are selling at a loss.”

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Most Homes Still Up Since Last Sale

While 53% of homes have lost value over the past year, only 4.1% are currently worth less than their last sale price. And just 1.6% are down substantially – more than 5% – from the last time they were sold. New listings show a similar trend: only 3.4% are hitting the market below their prior sale price.

While Zillow’s estimated home values have fallen from recent peaks, most owners still hold solid equity. The median home was last purchased 8.6 years ago and has risen in value by 67.2% since then.

The national average drawdown from peak value is 9.1%, up from 3.5% in spring 2022. But it remains far below the 27% seen in early 2012.

A recent report by Intercontinental Exchange (NYSE:ICE) has found that the number of homeowners who owe more on their mortgage than their home's worth, or are underwater, has reached nearly 900,000. This accounts for 1.6% of all U.S. mortgage holders, and is the highest level in three years.

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Where The Declines Are Concentrated

The biggest drops have been felt in the West and South. In Denver, 91% of homes lost value in the past year, followed by Austin, Texas at 89%, Sacramento, California at 88%, and both Phoenix and Dallas at 87%. In total, 49 of the 64 major metros in these regions saw the majority of homes decline in value, according to Zillow.

Meanwhile, the Northeast and Midwest are holding up better. Only three major metros there saw majority declines: Minneapolis at 55%, Des Moines, Iowa at 54% and Scranton, Pennsylvania at 52%.

Still, the trend is spreading. The share of homes falling in value has climbed quickly, up from just 16% a year ago.

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Some Losses Are Deeper, But Still Uncommon

While the share of homes worth less than their last sale price has risen from 2.8% to 5.9% over the past year, that number is still lower than the 7.9% seen pre-pandemic. And just 1.7% of homes are down more than 5% from their last sale price.

In hot markets during the pandemic boom, some losses are deeper. Austin stands out again, with 17% of homes now worth significantly less than what buyers paid.

But as the report notes, these are not realized losses unless someone sells. And most sellers aren't rushing. Only 3.4% of new listings are priced under the last sale price. This suggests homeowners are holding out for a stronger market rather than accepting a loss.

“Owners are not being driven to sell their homes or list at large discounts,” the report said.

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This article More Than Half Of U.S. Homes Lost Value Over The Past Year, The Highest Share Since 2012, New Data Shows. 'Homeowners May Feel Rattled' originally appeared on Benzinga.com