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Homes prices are surging in all 50 major U.S. metropolitan areas for the first time in three years, according to a Redfin (RDFN+0.98%) report released Tuesday.
In December, home prices across the country climbed 6.3% year-over-year to a median of $427,670 — their largest increase in almost a year, the real estate site said. Midwest cities have seen the largest price increases, with Cleveland leading the way as home sale prices rose 15%. Milwaukee and Philadelphia had the next fastest price growth.
“Places that have long been 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.
Meanwhile, home prices rose the slowest in Florida. In Tampa, home prices rose just 0.5% year over year in December, the smallest increase among the top 50 metros, followed by Orlando and Jacksonville. Austin and San Antonio, both in Texas, were next.
A year prior, home prices rose in just 41 metros. The resurgence in home prices comes as housing supply remains near historic lows and mortgage rates push up above 7% once again, encouraging people who don’t absolutely need to move to keep put.
“Affordable housing havens have become harder and harder to come by; even places that saw some price relief last year, like Texas and Florida, are now seeing prices tick back up,” de la Campa added.
He noted that people looking to move this year are more likely to choose to rent, given that it’s more affordable.
Rents are expected to remain about the same with a small, 0.1% drop in 2025, Realtor.com (NWSA+1.59%) forecasts. As of Jan. 21, the median rent in the U.S. is $2,000, flat from a year prior, according to Zillow (Z-0.01%).
While the housing market isn’t projected to see a full recovery this year, homebuyers might get a breather. Realtor.com expects existing home inventory will jump 11.7% this year, continuing 2024 growth.
Months supply, a key indicator of market balance, is expected to shift to an average of 4.1 months in 2025, from 3.7 months in 2024. While anything under four months is typically considered a seller’s market, four-to-six months of supply is widely seen as a balanced market, Realtor.com said.