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The former ‘affordable housing paradises’ where house prices are rising

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In Cleveland, Ohio, house sales prices rose by 15 percent in the year to December 2024 – the most of any of the 50 largest US cities

The price of homes in former ‘affordable housing paradises’ is skyrocketing, according to new data from Redfin.

In Cleveland, Ohio, home sales prices rose 15 percent in the year to December 2024 – the highest rate of all fifty largest US cities.

Milwaukee, Philadelphia, Miami and Chicago also all saw double-digit increases year over year.

In the year to December, house prices rose in all fifty of the most populous metropolitan areas. This is the first time this has happened since May 2022.

According to Redfin, a typical home in one of America’s largest cities now costs $427,670.

“Places long known as affordable places to live, like Cleveland and Milwaukee, are now seeing double-digit price increases — and that’s after home prices skyrocketed during the pandemic,” said Redfin senior economist Elijah de la Campa .

‘Affordable housing havens are increasingly difficult to find; Even places that saw some price reduction last year, such as Texas and Florida, are now seeing prices rise again.”

In 2024, home prices in former Covid boomtowns in these states fell and the market stagnated as supply far exceeded demand.

In Cleveland, Ohio, house sales prices rose by 15 percent in the year to December 2024 – the most of any of the 50 largest US cities

Home prices soared during the pandemic as record low mortgage rates boosted homebuyer demand.

They then fell in 2023, when mortgage rates rose again to their highest level in 20 years.

But prices have recovered in the past year as buyers have grown accustomed to high mortgage rates.

Despite a slight decline last autumn, mortgage interest rates have risen again to 7 percent.

The average 30-year mortgage rate is 7.04 percent, according to the latest data from Freddie Mac on Jan. 16.

Real estate prices are also rising because there is a shortage of homes for sale, according to Redfin.

In Cleveland, prices rose 15 percent year over year in December.

In Milwaukee, they rose 14.5 percent. They rose 14 percent in Philadelphia, 11.8 percent in Miami and 11.1 percent in Chicago.

In Milwaukee, prices rose 14.5 percent through December 2024

In Milwaukee, prices rose 14.5 percent through December 2024

Home prices in Miami rose 11.8 percent over the year

Home prices in Miami rose 11.8 percent over the year

“Cleveland may still have a reputation as a haven for affordable housing among out-of-towners, but not so much among locals,” says Redfin Premier real estate agent Bonnie Phillips.

“Cleveland may still have a reputation as a haven for affordable housing among out-of-towners, but not so much among locals,” says Redfin Premier real estate agent Bonnie Phillips.

Bonnie Phillips, a Redfin Premier real estate agent in Cleveland, explained some of the reasons why prices are rising in the city.

“Many sellers have a very specific number in mind because they’ve seen their neighbor sell for $40,000 over asking price during the pandemic,” she said.

They are willing to walk away if they don’t reach that number, which is a factor that keeps prices high.”

With affordability under such pressure, buyers feel empowered to ask for discounts, she said, but they are often shut down by sellers, even if the requests are small.

She continued, “Cleveland may still have a reputation as a haven for affordable housing among out-of-towners, but not so much among locals.

“Many families have sold out, and those who can still afford to buy are having to move to neighborhoods where they don’t really want to live. Their dream of owning a beautiful farm on 1.5 hectares has shifted to the reality of a small house in an urban area.’

At the other end of the spectrum, house prices rose just 0.5 percent in the year to December in Tampa, Florida.

This was the smallest increase among the top 50 metros.

The typical home in one of America's largest cities now costs $427,670 (Photo: Homes in Philadelphia, Pennsylvania)

The typical home in one of America’s largest cities now costs $427,670 (Photo: Homes in Philadelphia, Pennsylvania)

This was followed by Orlando and Jacksonville, with increases of 1.3 percent, Austin, Texas, with 1.5 percent and San Antonio with 1.6 percent.

Although Florida and Texas are home to all five of the cities with the smallest price increases, this is still a marked difference from last year.

Until December, it was common for home prices to fall in these two states.

Texas and Florida have built a lot of homes, limiting price growth, Redfin said.

Buyer demand is also lackluster as many people have been priced out of pandemic homebuying hotspots.

And especially in Florida, an insurance and climate crisis has many house hunters on edge.

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