FINANCE
Which regions of the US have seen home prices increase most over the last five years?
A look at how the housing market has shifted regionally since 2019. Which regions have seen the greatest increases in property values?
Home prices remain high, though mortgage rates are beginning to trend downward as many lenders prepare for a rate cut by the Federal Reserve in September.
The pandemic increased prices in the housing market by shifting buyer preferences to new geographies and leading to an increase in savings that sent some households into the market, increasing demand. The increase in demand, with supply remaining relatively constant, led prices to rise quickly, and in parallel, the Fed began hiking interest rates, which further priced some potential buyers out of the market.
The Federal Finance Housing Authority (FFHA) publishes a monthly report called the Home Price Index (HPI) on changes in housing prices, which takes a regional and national view.
The HPI tracks changes in average prices “in sales or refinancings on the same properties” to gain insights into fluctuations in specific, more populated housing markets. “We obtain this information by reviewing transactions on single-family properties with mortgages purchased or securitized by Fannie Mae or Freddie Mac,” explains the agency. Looking at the same set of properties allows the agency to build a historical record that dates back to 1975. However, since it does not track all sales, the percent increases tracked by the HPI are likely to be higher than if all sales were included. When comparing prices in June 2024 to those tracked in June 2019, prices have increased by 57.59 percent, with different regions seeing prices rise to different extents.
Regional changes in price
- South Atlantic | Delaware, Maryland, District of Columbia, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida: 69.20%
- New England | Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut: 64.64%
- East South Central | Kentucky, Tennessee, Mississippi, Alabama : 61.70%
- Mountain | Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New Mexico: 60.80%
- Middle Atlantic | New York, New Jersey, Pennsylvania: 58.71%
- East North Central | East North Central Michigan, Wisconsin, Illinois, Indiana, Ohio: 57.28%
- West North Central | West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas, Missouri: 50.42%
- West South Central | West South Central: Oklahoma, Arkansas, Texas, Louisiana: 49.14%
- Pacific | Hawaii, Alaska, Washington, Oregon, California: 48.21%
USA: 57.79%
How this data compares to prices for new homes
However, data from the US Census Bureau that examines the sale of new homes estimates that prices increased 27 percent between 2019 and 2024. The Census Bureau only tracks changes in price for four regions: Northeast, West, South, and Midwest. According to their latest release on Q2 2024, prices on new homes have risen the most in the Northeast (54.69%), followed by the homes in the Midwest (36.05%), the West(30.55%), and lastly, the South (27.09%).
When comparing the two indicators, it is clear that home prices in the Northeast and New England have seen the most significant rise over the last five years. The five states that makeup New England—Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont—have all seen their populations increase in recent years, which could contribute to an increase in housing prices as buyers face more competition.
More houses may be coming on the market
Redfin has reported that listings are beginning to increase, which could help to soften prices. Over the last year, the online real estate information hub reports that prices have increased 3.4 percent. For comparison, from August 2022 to August 2023, the number of new listings fell by 11.7 percent, and the year before that, they had fallen by 14.7 percent.