November 13, 2023
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The nationwide trend shows home values climbing in most areas.
The U.S. housing market has been feeling the heat of rising prices, but there are pockets of cool emerging.
The nationwide trend shows home values climbing in most areas. However, the National Association of Realtors' (NAR) third quarter housing market report finds there are a few cities, including Austin, Texas, Honolulu, Hawaii, and Jackson, Mississippi, where the tides are turning and homes are becoming that bit more affordable.
Nationally, the housing market remains resilient with more than 80 percent of metro areas seeing price hikes, pushing the median home cost to $406,900, according to the NAR. The wealth accumulation for homeowners since the pre-pandemic days is notable, NAR chief economist Lawrence Yun said, with typical homeowners seeing their net worth surge by over $100,000.
Yet, the dream of homeownership hangs in the balance for many, especially millennials and younger generations. "The persistent lack of available homes on the market will make the dream of homeownership increasingly difficult for younger adults unless housing supply is significantly boosted," Yun said in the report.
An Affordability Crisis
An affordability crisis is deepening as buyers grapple with mortgage rates that have soared to highs not seen since the early 2000s, ranging from 6.81 percent to 7.31 percent over the quarter. This is resulting in higher mortgage payments, meaning families need a substantial income to manage the financial weight of homeownership.
In nearly half of the markets tracked by the NAR, a six-figure income is the new threshold for affording a typical home, however median family incomes rose to $98,287 in the third quarter, the NAR said.
Regional Dynamics and Price Variations
Geographically, the South led the pack in the third quarter with the most existing home sales and modest year-over-year price appreciation. In contrast, the Northeast and Midwest recorded even stronger growth. However, some areas are seeing a retreat from the frenzied price ascents of the past years.
While some of the median-priced homes on the list are pricier than the national average, some homebuyers might want to look at the following cities as prices begin to fall from record highs.
Austin, Texas: -10.3 percent year over year to $485,700
Honolulu, Hawaii: -5.8 percent year over year to $1,061,900
Jackson, Mississippi: -4.8 percent year over year to $234,200
Shreveport, Louisiana: -4.6 percent year over year to $210,500
Cape Coral, Florida: -3.6 percent year over year to $405,000
St. George, Utah: -3.6 percent year over year to $541,900
Kennewick, Washington: -2.5 percent year over year to $433,600
Macon, Georgia: -2.4 percent year over year to $219,200
Chico, California: -1.8 percent year over year to $424,700
Myrtle Beach, South Carolina: -1.8 percent year over year to $366,700
Salem, Oregon: -1.7 percent year over year to $456,200
"Following the big price changes during the last several years, it's natural to witness momentary swings in prices," Yun said. "Some markets that experienced sizable home price gains since 2020 have turned lower, resulting in temporary relief for prospective homebuyers."
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