After almost three years of explosive growth, home price increase rates began to cool in the middle of 2022. Before then, according to the S&P Case-Shiller home price index, through much of 2022, home prices nationwide rose nearly 20% most months year over year. That number has dropped below 5%. The primary cause is mortgage rates which have doubled in just over a year. This, in turn, was due to aggressive interest rate increases by the Federal Reserve.
In Redfin’s new “Housing Market Update: Demand Outpaces Limited Supply, Making Some Markets Feel Hot Despite Few Sales,” the authors make the point that supply is low because people do not want to sell their homes at a discount to what they would have fetched a year ago. Some also had a low mortgage on their homes, many below 3%. New listings fell 21.8% in the four weeks before April 2. The study covered 400 metros.
Redfin Deputy Chief Economist Taylor Marr pointed out, “Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers. Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow.” The median asking price was $391,851, which is about the same as a year ago.
The city where home prices rose at the greatest pace for the four weeks was Milwaukee, at 11.4% year over year. Three Florida cities followed this. Migration to Florida has been one of the major population trends over the last three years. Prices rose 8.9% in Fort Lauderdale, 8.2% in West Palm Beach, and 7.9% in Miami. All are within 50 miles of one another.
This is how much home you can buy for $200k in each state.
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