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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 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?

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