2024 Housing Market Shows Resilience: Price Gains Across 90% of Metro Areas

The fourth quarter of 2024 demonstrated remarkable resilience in the U.S. housing market, with an overwhelming majority of metropolitan areas recording price increases despite fluctuating mortgage rates. This comprehensive analysis reveals the current state of the housing market and its implications for both homeowners and potential buyers.

Market Performance and Regional Dynamics

The housing market's strength was evident across 201 out of 226 metro areas, representing an impressive 89% of markets showing price appreciation. The national median single-family existing-home price reached $410,100, marking a 4.8% increase from the previous year. This growth accelerated from the third quarter's 3.2% year-over-year increase, suggesting strengthening market conditions.

Regional performance varied significantly, with the Northeast leading price appreciation at 10.6%, followed by the Midwest at 8.0%, and the West at 4.0%. The South, while showing more modest price growth at 2.1%, maintained its position as the largest market share holder, accounting for 45.1% of single-family existing-home sales.

Emerging Market Leaders and Price Trends

The standout performers in price appreciation revealed interesting geographic patterns, particularly in the Midwest:

• Jackson, Mississippi topped the list with a stunning 28.7% increase

• Peoria, Illinois followed with 19.6% growth

• Chattanooga, Tennessee-Georgia showed strong performance at 18.2%

• Multiple Midwest cities, including Cleveland-Elyria and Akron, Ohio, demonstrated robust growth above 15%

California's Dominance in Premium Markets

The luxury segment remained dominated by California, claiming eight of the top ten most expensive markets nationwide. Notable highlights include:

• San Jose-Sunnyvale-Santa Clara leading at $1,920,000 (9.7% increase)

• Anaheim-Santa Ana-Irvine at $1,360,000 (4.7% increase)

• San Francisco-Oakland-Hayward at $1,315,600 (5.2% increase)

Affordability Trends and Consumer Impact

The fourth quarter brought modest improvements in housing affordability. The typical monthly mortgage payment for a single-family home with a 20% down payment decreased to $2,124, representing a 1.7% reduction from the previous year. First-time buyers saw similar relief, with starter home payments decreasing by $35 year-over-year.

Key affordability metrics show:

• Families typically spent 24.8% of income on mortgage payments, down from 26.5% year-over-year

• First-time buyers allocated 37.4% of family income to mortgage payments

• 43.8% of markets required a qualifying income of at least $100,000 for a 10% down payment

Insights

What's driving the strong performance in Midwest markets?

The Midwest's robust performance can be attributed to relatively lower housing costs, strong job markets in certain metros, and increasing remote work opportunities allowing for geographic flexibility.

How sustainable is California's premium market dominance?

Despite high prices, California's market leadership remains supported by strong tech sector employment, limited housing supply, and persistent demand in key economic centers.

Will housing affordability continue to improve?

While recent trends show modest improvements, affordability remains highly dependent on mortgage rate movements and local market dynamics. Continued price appreciation may offset the benefits of potentially lower mortgage rates.

What should potential homebuyers consider in the current market?

Buyers should carefully evaluate regional market differences, consider relocating to more affordable areas if possible, and focus on long-term housing needs rather than short-term market timing.

This market analysis reveals a housing sector showing remarkable resilience and regional diversity. While challenges persist, particularly in affordability for first-time buyers, the market continues to demonstrate strength across most metropolitan areas. The varying regional performances offer opportunities for both investors and homebuyers willing to explore different markets.