Home buyers continue to face rising prices due to a dire shortage of homes for sale in the U.S., and a new report reveals that Midwestern cities are facing the most upward pressure.
According to a monthly report by the right-leaning think tank American Enterprise Institute, U.S. home prices appreciated 6.4% in January, as compared to the year before.
Price appreciation accelerated from 5.8% a month prior, AEI said, but the think tank expects home-price appreciation to slow to 5% by the end of the year.
Of the 10 metro areas where home-price appreciation was growing the fastest, eight were in the Midwest.
The five metro areas where home prices grew the fastest in January were: Indianapolis, Ind.; Grand Rapids, Mich.; Milwaukee, Wisc.; Cleveland, Ohio; and Providence, R.I.
The typical home in Indianapolis was $216,000, and $261,000 in Grand Rapids, according to Zillow, far below the national average of $343,000.
The top five and bottom five metros with the highest and lowest home-price appreciation in January 2024.
Source: American Enterprise Institute.
As seen in the table above, home prices appreciated by 13.1% in January in Indianapolis, as compared to the year before.
At the bottom of the list, the 10 metros with the slowest home-price growth included nine in the South.
Home price growth was the lowest in Austin, Texas; New Orleans, La.; Boise City, Idaho; San Antonio, Texas; and North Port, Fla.
The typical home in Austin was valued at $525,600, and $241,000 in New Orleans, according to Zillow.
Home prices, in fact, fell in the bottom four cities, with Austin notching a 1.7% drop, the report found.
Austin is also the city that saw the biggest drop in home prices from peak-to-trough. Between the peak of the market and the low point, Austin home prices are down 16.7%, according to AEI.
How have higher home prices affected your life and how you think about the U.S. economy? Let us know at readerstories@marketwatch.com. One of our reporters might reach out to you to learn more.
See also: How much money do you need to buy a $400,000 house with a 7% mortgage rate?
