Housing
The City Where Home Prices Have Risen Most in the Past 10 Years
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The U.S. home market has been through brutal lows and record highs since the collapse of the market in 2008 and 2009. The financial meltdown-driven recession coupled with high-risk adjustable interest rate mortgages dropped home prices in some markets by over 30% in a short period. Foreclosures reached an all-time high well into the hundreds of thousands. The market took much more than a decade to recover.
The blood bath was followed much more recently by a record run-up in home prices, which may have peaked earlier this year. According to the carefully followed S&P Case Shiller home price index, nationwide home prices in the United States rose by 20% year over year most months in 2022. In several markets, the increase was above 30%.
The recent run-up was driven by low mortgage rates and the fact that people could work from home. Mortgage interest rates fell to under 3% for a 30-year fixed rate mortgage.
Millions of Americans also had a chance to relocate after the start of the COVID-19 pandemic. Almost every company in America had to shut its offices. This allowed people to move to what they considered desirable places with a good quality of living. In these markets, prices were pressured up substantially.
The picture of home prices over the period of a decade is much different from the two-year surge the market has just posted.
Point2 has put together an analysis of the U.S. market based on prices in 2011 and 2021. This data, which covered 190 cities, came from the National Association of Realtors.
The markets that had the largest increase in home prices have little in common. Some were markets that traditionally have very low home prices. Others are markets where prices have surged in just the past few months. Some of these are the largest metros in the country. Others are fairly small as measured by population.
Over the 10 years, the median price of a home in America has risen 112% to $353,600. In the second quarter of 2022, the figure reached $414,000.
The city with the highest percentage increase is among the poorest, in both income and home values. The median price for a home in Detroit rose 357% to $245,700. This price remains well below the national median figure, and the income situation in the city has not improved much over the decade.
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