Yahoo Finance 7 Sunbelt Cities Where Home Prices Increased the Most in the Past 5 Years
The housing market has been an arduous one for many homebuyers, as the combination of high mortgage rates, soaring home prices and lack of inventory has paved a difficult road to homeownership.
Learn: The Most Expensive City in Every State
Explore: 6 Genius Things All Wealthy People Do With Their Money
The numbers speak for themselves: a new Realtor.com analysis found the market is still missing up to a whopping 7.2 million homes — the result of more than a decade of underbuilding relative to population growth. And in certain areas of the country, high demand for lagging housing is even more pronounced, making prices skyrocket even more.
The Realtor.com report found that many sunbelt metro areas grew faster than home permitting activity. Hannah Jones, senior economic research analyst at Realtor.com, said in the past five years, high demand in sunbelt metros put pressure on available inventory, leading to buyer competition and price growth.
“New construction struggled to keep up with rapid population growth in these popular locales, which contributed to limited inventory and steep prices,” said Jones. “Sunbelt metros saw a boom in popularity during the pandemic, which made it challenging for construction to keep up with demand.”
Jones added that high prices and mortgage rates mean many would-be buyers can no longer afford to purchase a home in these areas. “Softened demand could give inventory a chance to recover, which would take some pressure off of prices,” she said.
The Daytona metro area saw household formations outpace permitting activity by the widest margin among the largest U.S. metros. According to Jones, “This means that new construction activity failed to keep up with population growth. As a result, inventory remained 12.6% below pre-pandemic levels in January 2024, and prices were 48.4% higher.”
In addition, the Palm Bay metro area saw a similar situation play out as Daytona over the last five years. Jones noted that “population growth outpaced construction activity over the last decade, resulting in significant price growth and inventory depletion.’ These markets saw significant attention during the pandemic, which made it even more difficult for construction activity to keep up with demand.
Here are the top seven Sunbelt metros where homes increased the most:
Deltona-Daytona Beach-Ormond Beach, Fla.
Median Listing Price Change (Jan 2024 vs. Jan 2019): 48.4%
Jan 2024 Listings vs. 2019: -12.6%
San Antonio-New Braunfels, Texas
Median Listing Price Change (Jan 2024 vs. Jan 2019): 17.7%
Jan 2024 Listings vs. 2019: 15.2%
Palm Bay-Melbourne-Titusville, Fla
Median Listing Price Change (Jan 2024 vs. Jan 2019): 38.8%
Jan 2024 Listings vs. 2019: -14.8%
Stockton, Cali.
Median Listing Price Change (Jan 2024 vs. Jan 2019): 41%
Jan 2024 Listings vs. 2019: -50.6%
Riverside-San Bernardino-Ontario, Cali.
Median Listing Price Change (Jan 2024 vs. Jan 2019): 46.6%
Jan 2024 Listings vs. 2019: -48.6%
Bakersfield, Cali.
Median Listing Price Change (Jan 2024 vs. Jan 2019): 56%
Jan 2024 Listings vs. 2019: -42.1%
Miami-Fort Lauderdale-Pompano Beach, Fl.
Median Listing Price Change (Jan 2024 vs. Jan 2019): 44.7%
Jan 2024 Listings vs. 2019: -36.4
Jones noted that despite high costs, the market is expected to ease this year, with mortgage rates predicted to decrease. Therefore, housing could get slightly more affordable. “Many undersupplied markets have seen prices climb high enough that buyer demand has eased, which could take some pressure off of prices and improve affordability conditions,” she concluded.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 7 Sunbelt Cities Where Home Prices Increased the Most in the Past 5 Years
