(NewsNation) — The number of homeowners taking a loss while selling has more than doubled since last year in many parts of the country, with San Francisco taking the biggest hit.
Redfin analyzed home sales data, noting that most homeowners are still making a profit when selling their houses. However, the number of sellers who saw a loss has more than doubled in many locations, with some major metro areas hardest hit.
At the top of the list is San Francisco, where 12.3% of homes are selling at a loss. It’s followed by Detroit, Chicago, New York and Cleveland, though the percentage of homes selling for less than they were bought for is well below 10% in all those areas.
San Francisco sellers are being hit as hard as they are because the market is undergoing a correction from extremely high prices. High mortgage rates, tech layoffs and the rise of remote work contribute to a drop in housing prices, though Bay Area real estate remains very pricey.
Areas where homeowners are least likely to take a hit when selling include Boston, San Diego, Providence, Rhode Island, Kansas City, Missouri, and Fort Lauderdale, Florida.
While sellers may be unhappy to lose money on a sale, buyers are still struggling. It’s cheaper to rent than buy in all of the major metro areas in the U.S. with younger buyers in particular feeling locked out of the housing market due to high prices and high interest rates.
A low supply of homes has helped keep prices high, along with an increase in older Americans who aren’t downsizing and selling their houses the way previous generations did and homeowners who are waiting out any dip in prices rather than selling at a loss. High rents also make it harder for prospective buyers to save up for a down payment.
One possible solution to increasing home ownership that’s been floated is Dutch-style mortgages, where interest rates drop over time as the loan is paid off. But it’s unclear if American investors would be willing to back such mortgages and whether they would appeal to sellers, especially those who don’t intend to remain in a particular home long term.