New report finds the price of owning a home skyrocketed in 90% of US cities
Homeownership costs have surged in nearly 90% of metro areas across the United States, according to a recent study by the National Association of Realtors (NAR). In the fourth quarter of 2024, homeownership expenses rose in 201 of 226 tracked metro markets, amounting to 89% of the areas measured. This marks a significant increase in housing costs across the country.
Compared to the same period last year, 14% of these metro areas saw double-digit price hikes, up from just 7% in the third quarter. The surge in homeownership costs comes as 30-year fixed mortgage rates ranged from 6.12% to 6.85%, adding additional pressure on potential homebuyers.
According to Lawrence Yun, Chief Economist at NAR, “Record-high home prices and the accompanying housing wealth gains are definitely good news for property owners. However, renters who are looking to transition into homeownership face significant hurdles.” This highlights the growing gap between renters and those who already own homes, as the costs of entry continue to climb.
Regional Hotspots for Home Price Increases
The Midwest stands out as a region experiencing some of the largest home price increases. Six out of the ten metro areas with the highest median price jumps are in this region. Jackson, Mississippi, led the way with a massive 28.7% surge in home prices. This significant spike reflects the growing demand and limited inventory in many parts of the country.
Elmira, New York, was the only town in the state to make the top 10, ranking fourth with a 17.6% increase in median home prices. Other metro areas in the top 10 include Peoria, Illinois, where prices rose 19.6%, and Chattanooga, Tennessee-Georgia, with an 18.2% hike.
Additionally, Fond du Lac, Wisconsin, saw a 17.6% increase in home prices, followed by Cleveland-Elyria, Ohio, at 16.4%. Bismarck, North Dakota, experienced a 15.8% rise, and Akron, Ohio, recorded a 15.5% increase. Other cities with notable gains include Blacksburg-Christiansburg, Virginia, at 15% and Canton-Massillon, Ohio, at 14.9%.
The increase in these markets reflects a broader trend of escalating costs across the country, especially in areas with limited housing supply. Despite the rising prices, demand remains high as potential buyers compete for available homes.
Nationwide Price Trends and Market Outlook
On a national level, the median price of a single-family home rose by 4.8% compared to last year, bringing the average price to $410,100. This increase follows a long-term upward trend, with home prices having surged by nearly 50% since 2019. The rapid price escalation reflects both demand pressures and limited inventory, making it harder for many buyers to enter the market.
The steepest price increases are concentrated in areas with a mix of high demand and limited available homes. These markets, where prices have spiked, are often where the gap between renters and homeowners is widest. Many prospective buyers are being locked out of the market due to these rising costs.
The situation is especially challenging for first-time buyers and renters hoping to transition into homeownership. As home prices rise, it becomes increasingly difficult for those with median incomes to afford a home. While some areas have seen higher-than-average price increases, others are witnessing only modest gains, reflecting regional variations in the housing market.
California’s High-Cost Housing Markets
California remains the state with the most expensive housing markets. Cities like San Jose continue to lead the pack with the highest median home prices in the nation. The median price for a home in San Jose is approaching $2 million, making it unaffordable for many residents. This astronomical price is indicative of the broader trend in high-cost coastal cities.
Despite the price increases in many regions, there are areas where the market is still showing resilience. The demand for homes in certain markets, particularly in areas with growing industries, is expected to continue driving prices upward. However, this may lead to further affordability challenges for middle-income families hoping to buy their first home.
As prices continue to rise, the housing market remains in flux. While homeowners with locked-in low mortgage rates may benefit, many renters and potential buyers face significant obstacles in entering the market. The growing affordability gap could have lasting effects on the housing landscape in the years to come.
Sources -
https://www.nar.realtor/research-and-statistics/housing-statistics/metropolitan-median-area-prices-and-affordability
