U.S. housing price growth notably changed in a one-year period, with home prices rising rapidly in some cities amid predictions that a housing market crash would happen this year.
Some experts expected that the booming housing market in 2022 would end this year as the Federal Reserve continues to hike interest rates to combat inflation in the country. Meanwhile, mortgage rates increased over 7 percent —which is more than double the average 3.22 percent rate for a 30-year mortgage in January 2022—however, the housing market remained stable as a low supply of homes fuels a housing shortage.
High home prices compounded with higher mortgage rates last year and a consistent lack of supply led to a drop in sales across the country. New data published by SmartAsset on Thursday showed housing price growth from May 2022 to May 2023, ranking the most and least expensive homes in 532 markets.
Fast-Rising Home Prices
Home prices in Florida increased 5 percent compared to last year, with the average home price reaching $394,000. The most expensive homes are found in the city of Weston at $670,000 followed by Miami at $553,000. Meanwhile, Lauderhill home prices increased 15 percent between 2022 and 2023.
Connecticut is another state where home prices increased rapidly, with houses in Hartford getting 20 percent more expensive over the past year than any other city.
SmartAsset also reported "large home price increases" in cities where an average price is lower than $300,000, including Deerfield Beach in Florida, Fayetteville in North Carolina, New Jersey's Camden and Trenton, Georgia's Warner Robins and Savannah, Texas' Brownsville and Tyler, and Iowa City in Iowa.
Dipping Home Prices
The overall average home prices in Texas saw a slight change of a 1 percent increase year over year, according to SmartAsset. As of May 2023, the average home price in Texas reached $315,000. Prices were highest in Frisco and Austin $662,000 and $567,000, respectively. Still, home prices in Austin dipped by over 8 percent compared to May 2022.
Meanwhile, San Francisco saw a 13 percent decline in house prices over the last year, marking the second largest drop after a 15 percent decrease in rental prices in Dublin, California. The average home price in San Francisco is $1.2 million, while the average home price in New York City is $700,000. (NYC home prices increased 3 percent in the last year.)
Highest Home Prices
California ranks at the top on SmartAsset's data when it comes to the 10 most expensive housing markets in the U.S. The state has 35 cities with an average home price of over $1 million.
Palo Alto is ranked by SmartAsset as the top city with the highest home prices, slightly over $3 million, followed by Newport Beach at $2.9 million, while Sunnyvale and Mountain View were at around $1.8 as of May 2023.
A few cities in Washington state were among the top places with the highest prices, including Sammamish, which ranked 12th with an average home price of $1.4 million, and the cities of Bellevue and Redmond had an average home price of $1.2 million. Meanwhile, the average home price in Seattle reached $831,738.
Newsweek reached out by email to Freddie Mac, a Federal Home Loan Mortgage Corporation, and the mortgage rate website HSH.com for comment.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Fatma Khaled is a Newsweek weekend reporter based in New York City. Her focus is reporting on U.S. politics, world ... Read more
