Home Prices Are Back on the Rise — Even in 'Affordable' Cities

If it seems like bargains in housing are getting harder to find, you’re not wrong. Even affordable places to live got pricier at the end of 2024.

According to a report out Tuesday from Redfin, home prices in every single one of the biggest 50 cities in the U.S. rose in December from a year earlier. The last time the housing market experienced this much of a broad-based surge was in May 2022, when the Federal Reserve had just started to raise interest rates from their pandemic-era lows and buyers were anxious to lock in purchases before mortgage rates rose further.

Redfin notes that some of the biggest year-over-year jumps occurred in places that had managed to avoid the worst of the price increases that have frustrated would-be buyers in recent years.

“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,” Redfin senior economist Elijah de la Campa said in a news release.

In Cleveland, for instance, home prices shot up by 15% from a year ago. The increase was nearly the same in Milwaukee, where prices rose by 14.5%.

What’s more, even places that had seen price increases easing thanks to an influx of new supply have reversed that momentary reprieve.

Redfin’s data finds that, as recently as April 2023, the Federal Reserve’s anti-inflation campaign of interest rate hikes had succeeded in cooling the meteoric rise in home prices. In that month, only 19 of the top 50 metro areas saw year-over-year home price increases. But since then, Americans have largely adjusted to the impact of higher interest rates and continued to spend.

Home price increases also resumed because supply constraints have remained consistent. Redfin found that average home prices jumped by 6.3% between November and December 2024 alone, the largest month-over-month increase in almost a year. In a market like this, de la Campa predicted that more people waiting for home prices to come down before making an offer will be stuck waiting even longer. Many will decide to hold off and will rent for longer as a result, he said.

There are a couple of reasons behind the supply crunch: Builders aren’t constructing enough new homes to keep up with demand, and people who already own homes are staying put.

Redfin's data found that while price increases are broad-based, a few bright spots still remain. While Cleveland claimed the dubious distinction of having the fastest-rising home prices in December, Redfin noted that a number of other cities had double-digit year-over-year gains as well, including Philadelphia, Miami, Chicago and Baltimore. Some suburbs of New York City and Detroit also notched gains of 10% or more from a year ago.

Buyers looking for a silver lining should head to Florida — specifically, Tampa, Orlando or Jacksonville. Year-over-year price increases in all three cities were below 1.5%.

Or maybe check out Cleveland, after all. Even after its recent jump, the median sales price there is still a tick under $230,000, the third-lowest in the country behind Detroit and Pittsburgh.

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