The cities that saw the most change in 2024
When looking back on the housing market of the past year, it really seems like we’ve been on a roller coaster. And not just the ups and downs. The early part of 2024 was characterized by waiting and anticipation – much like that long, anxiety-inducing climb up the big first hill at the start of most roller coasters – as we waited for mortgage rates to come down.
Once we got over the crest of that hill, it was a wild ride.
Waiting for rates to come down
In our preview for 2024, we hoped to see that “rates may find themselves firmly in the 6% range for much of 2024.” We weren’t the only ones, as we quoted National Association of Realtors (NAR) chief economist Lawrence Yun saying, "I believe we've already reached the peak in terms of interest rates. The question is when are rates going to come down?"
That was the important question, indeed. Most eyes were on the Federal Reserve and its decisions with the federal funds rate. That is the rate commercial banks use when borrowing from each other on a nightly basis, and it has an indirect effect on many aspects of our economy. The Fed uses it as a tool to control inflation and support employment.
The hope for much of the year was that once the Fed decided to cut the rate, mortgage rates would follow. But for five Federal Open Market Committee (FOMC) meetings, the Fed decided to keep the rate fixed. But the big change in tone came after their July meeting, when Chairman Jerome Powell indicated that they were prepared to make a change at their next meeting. Mortgage rates responded accordingly and dropped nearly three quarters of a percentage point over the next few weeks.
Mortgage applications went up and homeowners started refinancing their mortgages to take advantage of savings with a lower rate.
How the Fed’s rate cut affected mortgage rates
At the September meeting of the FOMC, the committee surprised some by implementing a 0.5% percent cut to the federal funds rate. Some had expected a 0.25% cut. Strangely, mortgage rates went up after that rate cut, again by about a full percentage point. The presidential election and concerns about conflicts in other parts of the world were often cited as possible reasons for this.
After the November FOMC meeting, where the committee decided to cut its rate by another 0.25%, mortgage rates came down a bit again. As of this writing, there is one more Fed meeting in 2024, so we’ll have to wait and see what effect the decisions made there will have on mortgage rates.
However, there are a few ways you can outsmart higher mortgage rates:
- RateReduce: This temporary buydown allows you to keep your payments low with help from the seller of the home you’re buying. We offer five different Rate Reduce programs to help you ease into your new home and mortgage payment as you build equity.
- Adjustable Rate Mortgage (ARM): ARMs offer the potential for lower monthly payments at the beginning of the loan before the mortgage rate adjusts after five, seven or 10 years.
- Paying Points: You could save on your monthly mortgage payments by paying a little more at the beginning of the loan. This is known as buying down the rate or paying points to reduce your mortgage rate.
Remember the old saying of “date the rate, marry the house?” Essentially, you “marry” a house by buying a property that you are willing to commit to for years. Then you “date” the rate by getting the best rate you can when you purchase, then “break up” with the rate by refinancing when you can lower your rate or monthly payments.
Home price trends in 2024
Mortgage rates always receive the most attention when it comes to the housing market, but home prices and home listings also have a big effect on the homebuying experience.
In general, home prices go up over time. This is why homeownership is such a smart investment, because once you own the home, its value typically increases and gives you a good chance of making more money once you decide to sell. The flip side of that coin, however, is that rising home prices makes it hard for first-time homebuyers to afford buying a home.
The trend continued in 2024, as nationwide median-home prices increased from the year before each month through the first 9 months. In their third-quarter report, the NAR pointed out that the national median single-family existing-home price grew 3.1% from a year ago to $418,700.
“Home prices remain on solid ground as reflected by the vast number of markets experiencing gains,” said NAR’s Yun. “A typical homeowner accumulated $147,000 in housing wealth in the last five years.” Another way to look at that is home prices have gone up by a similar amount over the last five years.
Home price changes can vary greatly depending on where you live. The nationwide trends of home prices are affected by local trends like employment, that market’s economic growth and the quality of the homes in a specific city.
Markets that saw the biggest rise in home prices
Let’s take a look at the cities that experienced the most growth in home prices in 2024. We looked at the top 200 housing markets across the country using data from the Realtor.com® Economic Research team and identified the markets that saw the biggest change in home listing prices. We’re using change in price per square foot, which is a better apples-to-apples comparison than change in average listing price between areas.
- Norwich London, CT
Change in price per square foot, 2023-2024: +17.41%
Average listing price: $470,725 - Syracuse, NY
Change in price per square foot, 2023-2024: +14.58%
Average listing price: $297,000 - New Haven, CT
Change in price per square foot, 2023-2024: +13.40%
Average listing price: $399,950 - Hartford, CT
Change in price per square foot, 2023-2024: +13.00%
Average listing price: $399,900 - Youngstown, OH
Change in price per square foot, 2023-2024: +12.48%
Average listing price: $187,450
Interestingly, four of the five markets with the biggest increase in listing price are in the northeast. This trend is likely due to greater demand, tight inventory, and/or economic growth in these areas.
Markets that saw the biggest drop in home prices
On the other hand, here are the cities that saw the largest home price decreases in 2024.
- Naples-, FL
Change in price per square foot, 2023-2024: -13.16%
Average listing price: $749,000 - Miami, FL
Change in price per square foot, 2023-2024: -8.76%
Average listing price: $525,000 - Sarasota, FL
Change in price per square foot, 2023-2024: -8.35%
Average listing price: $474,224 - Punta Gorda, FL
Change in price per square foot, 2023-2024: -7.99%
Average listing price: $389,900 - San Francisco, CA
Change in price per square foot, 2023-2024: -7.01%
Average listing price: $996,500
It's notable that four out of the five areas with the largest price drops are in Florida, which isn't too surprising given that we're looking at prices following two major hurricanes impacting the state. Another connection among three of the five cities is that their average listing price is above $500,000, making them among the most expensive markets in the country. This shows that higher-end markets aren’t immune to the impact of price changes and economic shifts.
Housing inventory in 2024
One last factor that shaped the way the housing market played out in 2024 was the number of homes that were for sale, also known as housing inventory. When you're house hunting, home prices and current mortgage rates often grab your attention, but one factor you might overlook is how the number of available listings can impact what you ultimately purchase. To put it simply, “you can’t buy what’s not for sale.”
Low housing inventory was a big problem during the real estate frenzy of 2020-2021. With mortgage rates low during that time, homes were snatched up almost as soon as they hit the market. This nationwide trend created many frustrated would-be homebuyers, led to many buyers finding hacks for getting around low inventory and also caused home prices to rise significantly.
Fortunately, housing inventory improved this year. Unsold inventory at the end of the third quarter sat at a 4.3-month supply at the current sales pace. This is up from 3.4 months last year. That’s good news for first-time homebuyers who now have more options. Let’s take a look at the markets that saw the most inventory growth this year.
Where new home listings went up in 2024
- Burlington, VT
Change in number of homes for sale, 2023-2024: +67.02%
Average listing price: $499,900 - San Diego, CA
Change in number of homes for sale, 2023-2024: +63.27%
Average listing price: $979,200 - Chattanooga, TN
Change in number of homes for sale, 2023-2024: +63.26%
Average listing price: $399,450 - Bremerton, WA
Change in number of homes for sale, 2023-2024: +62.45%
Average listing price: $654,950 - Seattle, WA
Change in number of homes for sale, 2023-2024: +60.49%
Average listing price: $759,975
Two of the top five areas in terms of home listing growth are in Washington state, and three of the top five are among the most expensive markets in the country. This could point to cooling demand, slower sales or sellers attempting to capitalize on previously high market values in those areas.
Also, the surge in homes for sale across diverse markets signals a potential shift toward a buyer’s market, with increased inventory offering more options and potentially cooling prices in some areas.
Here’s where the number of homes for sale has gone down since last year:
- Tallahassee, FL
Change in number of homes for sale, 2023-2024: -7.32%
Average listing price: $317,500 - Erie, PA
Change in number of homes for sale, 2023-2024: -7.04%
Average listing price: $239,675 - Toledo, OH
Change in number of homes for sale, 2023-2024: +1.62%
Average listing price: $247,175 - York, PA
Change in number of homes for sale, 2023-2024: +1.82%
Average listing price: $344,500 - Boise City, ID
Change in number of homes for sale, 2023-2024: +2.21%
Average listing price: $574,950
Areas that are seeing fewer homes go up for sale are harder for buyers to find a home that checks all of their boxes, and they can also face more competition for those homes. If you find yourself in an area with low inventory, you should get a PowerBid Approval from Rate. This is a fully underwritten credit approval that can help you compete with cash offers.*
Using 2024 housing trends to be prepared for 2025
Knowing what happened over the last 12 months can help you prepare for buying a home in 2025. Depending on where you’re looking to buy, now could be a great time to get ready to kick off your home search. However, it's important to remember that local market conditions can look quite different from what’s happening nationwide. That’s why it’s so important that you work with a local expert who can help you make the most of what’s happening in your specific area.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.
Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Rate for current rates. Restrictions apply.
* PowerBid Approval (the “Approval”) is contingent upon receipt of executed sales contract, an acceptable appraisal supporting value, valid hazard insurance policy, and a re-review of your financial condition. Rate reserves the right to revoke this Approval at any time if there is a change in your financial condition or credit history which would impair your ability to repay this obligation and/or if any information contained your application is untrue, incomplete or inaccurate. Receipt of an application does not represent an approval for financing or interest rate guarantee. Not all applicants will be approved for financing. Restrictions may apply, contact Rate for current rates and for more information.