H
ome prices are defying the odds, rising in nearly 90% of metro areas in the final quarter of 2024. This resilience is a boon for property owners, with median home prices increasing by nearly 5% nationally to $410,100. However, this trend poses significant challenges for renters seeking to transition into homeownership.
The wealth gap between homeowners and renters continues to widen, with homeowners boasting a staggering $415,000 median net worth advantage over renters. This disparity is largely due to the difficulty in saving for down payments amidst record-high home prices.
The Northeast led the pack in terms of price growth, with a 10.6% increase in the fourth quarter. The Midwest followed closely behind, with an 8% surge. In contrast, the South and West saw more modest gains of 2.1% and 4%, respectively.
Top metro areas for year-over-year median home price increases include Jackson, Mississippi (28.7%), Peoria, Illinois (19.6%), and Chattanooga, Tennessee-Ga (18.2%). Despite these gains, housing affordability marginally improved in the fourth quarter, with mortgage payments decreasing by $37 to $2,134.
However, families still devote a significant portion of their income to housing costs, with 25% going towards mortgage payments. First-time homebuyers fare even worse, allocating 37.4% of their income towards mortgage payments.
California dominates the list of most expensive housing markets, with San Jose topping the list at $1.9 million. The least affordable market is Decatur, Illinois, with a median price of $135,100.
