House Prices Are Surging in One State
A home is under construction in a subdivision on July 19, 2023 in Hawthorn Woods, Illinois. Four of the metropolitan areas which have experienced the biggest year-over-year price increases in the first quarter of 2024 are in Illinois.
Three of the four metropolitan areas that have experienced the biggest year-over-year median price increases in the first quarter of 2024 are in Illinois, according to a recent report by the National Association of Realtors (NAR).
In Kankakee, the city with the highest gain in the entire state of Illinois, prices rose by 22.0 percent in the first three months of the year compared to the same timeframe in 2023, as per NAR’s latest quarterly report. In Rockford, they rose by 20.1 percent in the same period; in the metropolitan area of Champaign-Urbana, they climbed by 20.0 percent; and in Bloomington, by 18.5 percent.
These numbers might have been influenced by the types of homes sold during the quarter, according to NAR. But in Illinois’ case, the rise in price can be traced back to the shrinking availability of homes in the state’s market: fewer homes are being sold now compared to last year, but at higher prices.
According to Redfin data, home prices in the state were up 8.9 percent in March compared to last year, with properties selling for a median price of $282,000. On average, the number of homes sold was down 11.0 percent compared to March 2023.
Illinois was far from the only state to experience home price increases between January and March. Overall, more than 90 percent of metropolitan areas across the country saw prices climb. Some 30 percent of the 221 metropolitan areas analyzed by NAR saw double-digit annual price appreciation in the first quarter of the year, up from 15 percent in the last three months of 2023.
“Astonishingly, greater than 90 percent of the country’s metro areas experienced home price growth despite facing the highest mortgage rates in two decades,” said NAR Chief Economist Lawrence Yun in a press release shared with Newsweek. “In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
The group also linked the rise in home prices with the still-high cost of mortgages. In the first quarter of 2024, the 30-year fixed mortgage rate ranged from 6.60 percent to 6.94 percent, according to NAR.
At the national level, the median price for a single-family existing home went up by 5 percent to $389,400. In the last quarter of 2023, prices had increased year-over-year by 3.4 percent.
The 10 metropolitan areas with the largest year-over-year median price increases, besides the ones in Illinois, were Fond du Lac, Wisconsin (23.7 percent); Johnson City, Tennessee (19.3 percent); Racine, Wisconsin (19.0 percent); Newark, New Jersey-Pennsylvania (18.8 percent); New York-Jersey City-White Plains, New York-New Jersey (18.4 percent); and Cumberland, Maryland-West Virginia (18.2 percent).
Only 15 of the 221 metropolitan areas tracked by NAR (about seven percent) experienced home price declines in the first quarter of the year compared to a year earlier.
Despite the fact that price increases were focused in the Northeast and the Midwest, the highest home prices could still be found in the West, with eight of the top 10 most expensive markets in the country concentrating in California.
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