Home Prices Are High, But These Cities Are Bucking the Trend

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Home Prices Hit New Highs

U.S. home prices hit an all-time high in June, a tough pill to swallow for prospective home buyers as the housing unaffordability crisis is continuing. 

But there is some light at the end of the tunnel. For one, the Federal Reserve is expected to cut interest rates in September, which will likely bring relief for borrowers, including those looking at home loans. Last week, the 30-year fixed mortgage rate already fell to 6.44%, its lowest level since April 2023.

But the S&P CoreLogic Case-Shiller Home Price Index, which measures home prices across 20 key U.S. cities, also showed that there are bright spots on the map.

Uneven Prices

Home prices didn’t grow evenly in June: New York, San Diego, and Las Vegas led the way, with prices rising annually by 9%, 8.7%, and 8.5%, respectively. 

Meanwhile, home prices in Portland, Oregon, ticked up just 0.8% year-over-year. 

Even better for those in the market for a home of their own, costs have recently fallen in hotspots like Denver, Minneapolis, and Tampa, per Consumer Price Index data cited by a CNN report.

Think Small, Save Big

The divide could be down to home construction rates. Increased home building in Tampa has beefed up the housing stock and made its price growth rate one of the lowest nationwide. 

Meanwhile, strict zoning laws and densely populated areas, such as New York City, are seeing very different dynamics. NYC is also the most rent-burdened region in the country, according to a Moody’s report, with residents spending more than half their monthly income (58%) on rent.

The city has taken steps to remedy this. A proposed zoning reform — expected to create more than 100,000 new homes in NYC over the next 15 years — is currently undergoing public review, and will see a City Council vote this year.

But for now, Americans considering moving to a new city could save big by thinking small.

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