The Blubber

Home Prices Rise Across All Major U.S. Metro Areas for the First Time Since 2022

Home prices increased year over year in all 50 of the largest U.S. metropolitan areas in December, marking the first time this has happened since May 2022, according to a new report from Redfin.

By contrast, only 41 metros saw price gains in December 2023.

“Places long considered affordable—like Cleveland and Milwaukee—are now experiencing double-digit price increases, even after pandemic-era price surges,” said Redfin Senior Economist Elijah de la Campa. “Finding an affordable housing haven is becoming increasingly difficult. Even metros that saw some price relief last year, like Texas and Florida, are seeing prices tick back up. Many buyers this year may opt to rent instead, as rental affordability is expected to improve with more supply entering the market.”

Pandemic Boom, Post-Pandemic Rebound

Home prices soared during the pandemic due to record-low mortgage rates fueling buyer demand but declined in 2023 as rates hit a two-decade high. By April 2023, home prices were rising in just 19 metro areas, the lowest number since 2012.

Over the past year, however, buyers have adjusted to elevated mortgage rates, and low inventory has pushed prices higher.

In December, home prices posted their biggest gain in nearly a year, rising 6.3% year over year to a median price of $427,670.

Midwest Leads in Price Growth, Florida Lags Behind

Cleveland led the nation with a 15% increase in median home prices from the previous year. Other metro areas with double-digit price hikes included:

• Milwaukee (14.5%)
• Philadelphia (14%)
• Miami (11.8%)
• Chicago (11.1%)

“Many sellers are holding out for the kind of bidding wars they saw during the pandemic,” said Bonnie Phillips, a Redfin Premier real estate agent in Cleveland. “They have a number in mind because they saw their neighbor sell for $40,000 over asking. They’re willing to walk away if they don’t get that price, which is keeping home values high.”

At the same time, buyers are pushing for discounts due to affordability concerns—but sellers aren’t budging.

“Cleveland may still be seen as an affordable housing market by outsiders, but not by locals,” Phillips added. “Many families have been priced out, and those who can still buy often have to settle for neighborhoods they weren’t originally considering. Their dream of a farmhouse on 1.5 acres has shifted to the reality of a small home in an urban area.”