America’s real estate market is steeped in uncertainty as soaring mortgage rates effectively freeze buyer activity.
It has left many questioning: is property still a good investment?
But a new study by GoBankingRates claims to shed light on the areas that are most likely to help owners get the best returns.
Researchers analyzed the average house price – as recorded by Zillow – in major US metros as of January 2024 and established where prices have risen quickest in the past five years.
Their findings show that Atlantic City, New Jersey, is the best place to gain value on a property. The average home in the area costs $218,761, having shot up 102 percent in price since 2019 and 16 percent in the last year alone.
A new study by GoBankingRates claims to shed light on the areas that are most likely to help owners get the best returns
It was followed by Waterbury, Connecticut, where the typical home costs $249,073, up 15 percent from last year and 100 percent from five years ago.
The top five was rounded out by Lewiston, Maine, Mercedes, Texas, and Torrington, Connecticut.
By comparison, the national average home value in the US in January 2024 was $343,951, up 50 percent from 2019 and 3 percent from last year.
New Jersey was the state to appear most prominently on the list, with nine of the 25 places ranked located in the Garden state.
It was followed by Florida and Tennessee which had four cities each on the list.
Notably no cities in New York or California made the top 25. The rankings were compiled by combining the percentage changes in each city in one year and in the last five years.
The findings come after a separate report by property portal Redfin found the US housing market had gained $2 trillion in value over the last year.
Redfin’s analysis of more than 90 million homes across the country found the total value of residential real estate had increased 5.3 percent to $47.5 trillion in December.
However, experts have repeatedly sounded the alarm over a real estate ‘correction’ which will see house values fall somewhat after ballooning during the pandemic.
Former Oppenheimer analyst Meredith Whitney – who has been dubbed the ‘Oracle of Wall Street’ after predicting the 2008 financial crash – told DailyMail.com that house prices would start to fall as Baby Boomers begin downsizing.
She said: ‘Around 90 percent of housing stock is owned by over 40s while 74 percent is by those over 50.
‘It makes logical sense that lots of these owners will start to downsize in the next decade. That’s almost 35 million homes – it’s a huge number to go through the system.
Analyst Meredith Whitney, who is known as the ‘Oracle of Wall Street’, said house prices in some states will fall this year
Mortgage rates are hovering close to 7 percent – almost double where they were two years ago
‘My advice to homeowners is: if you want to sell, you’re better off doing it sooner than later.’
The average rate on a 30-year fixed-rate home loan is now 6.94 percent, according to Government-backed lender Freddie Mac. It is almost double what they were two years ago.
In a normal market this would be enough to dampen demand for homes and thus quash prices. However, several experts have noted that a widespread property shortage in the US has kept home values artificially high.
Data from Redfin shows that the typical US homeowner now spends twice as long in their properties as they did in 2005.
Today an owner can expect to spend 11.9 years in the same property, compared to 6.5 years two decades ago.
Whitney insists that there will be no house price ‘crash’ but rather an overdue correction.
City | Average house price | % change in 1 year | % change in 5 years |
---|---|---|---|
Atlantic City, New Jersey | $218,761 | 16% | 102% |
Waterbury, Connecticut | $249,073 | 15% | 100% |
Lewiston, Maine | $274,687 | 14% | 91% |
Mercedes, Texas | $123,572 | 13% | 92% |
Torrington, Connecticut | $255,834 | 14% | 81% |
Irvington, New Jersey | $359,441 | 10% | 101% |
Elizabeth, New Jersey | $498,548 | 15% | 75% |
Knoxville, Tennessee | $341,351 | 12% | 88% |
Camden, New Jersey | $115,800 | 12% | 85% |
Trenton, New Jersey | $307,421 | 12% | 84% |
Oakridge, Tennessee | $285,447 | 11% | 92% |
East Orange, New Jersey | $425,011 | 11% | 90% |
Golden Glades, Florida | $490,839 | 11% | 86% |
Willingboro Township, New Jersey | $303,989 | 10% | 92% |
West Little River, Florida | $401,228 | 12% | 84% |
Lakewood, New Jersey | $402,932 | 13% | 75% |
Donna, Texas | $131,471 | 11% | 84% |
Wilkes-Barre, Pennsylvania | $137,986 | 10% | 87% |
Forest Park, Georgia | $177,414 | 5% | 114% |
Clinton, Tennessee | $287,509 | 11% | 82% |
Miami Gardens, Florida | $449,676 | 11% | 81% |
North Miami, Florida | $473,109 | 10% | 84% |
Linden, New Jersey | $497,627 | 13% | 71% |
Lehigh Acres, Florida | $312,991 | 9% | 90% |
Elizabethton, Tennessee | $203,565 | 12% | 74% |
Americans are staying in their homes before selling up for twice as long as they did in 2005 – and baby boomers are to blame.
The typical homeowner spends 11.5 years in their house today, up from 6.5 years two decades ago, according to a new report by Redfin.
Researchers said the trend is being driven by older homeowners who are not ‘financially incentivized’ to move. A lack of homes on the market pushes up prices.
It comes after former Oppenheimer analyst Meredith Whitney told DailyMail.com that the house prices will finally start to decline as more seniors start downsizing – thereby freeing up homes.
According to Redfin’s analysis of US Census Bureau data, homeowner tenure peaked at 13.4 years in 2020.
The typical homeowner spends 11.5 years in their house today, up from 6.5 years two decades ago, according to a new report by Redfin
It comes after former Oppenheimer analyst Meredith Whitney, pictured, told DailyMail.com that the house prices will finally start to decline as more seniors start downsizing – thereby freeing up homes
The analysis also found that millennials were more likely to stay in their homes for shorter periods, in part because they change jobs more frequently than older generations.
Two in five baby boomers – those born between 1946 and 1964 – have lived in their home for 20 or more years.
By comparison, less than 7 percent of millennials – born between 1981 and 1996 – have lived in their home for ten years or longer.
The report notes: ‘Most – 54 percent – of baby boomers who own homes own them free and clear with no outstanding mortgage.
‘For that group, the median monthly cost of owning a home – which includes insurance and property taxes among other things – is just over $600.
‘Nearly all boomers who do have a mortgage have a much lower rate than they would if they sold and bought a new home with today’s 7 percent-ish rates.’
But researchers noted that older homeowners ‘hanging onto their homes’ is ‘an obstacle for young first-time buyers trying to break into the market.’
The average rate on a 30-year fixed home loan reached 6.77 percent, up from 6.64 percent last week, according to figures from Government-backed lender Freddie Mac
The findings echo comments made by Whitney, an analyst who was dubbed the ‘Oracle of Wall Street’ after she accurately predicted the 2008 financial crisis.
Her research shows that around 90 percent of housing stock is owned by over 40s while 74 percent is by those over 50.
However she claims a significant upheaval is in-store as more of these older owners start to sell up – freeing inventory and bringing prices down.
Whitney told DailyMail.com: ‘It makes logical sense that lots of these owners will start to downsize in the next decade. That’s almost 35 million homes – it’s a huge number to go through the system.
‘My advice to homeowners is: if you want to sell, you’re better off doing it sooner than later.’
During the pandemic the median US house price ballooned from $303,465 in March 2020 to $402,045 by December 2023, Redfin figures show.
Many families were embroiled in a so-called ‘race for space’ as they looked for bigger homes and gardens to spend lockdown. A widespread shift to working-from-home also unchained workers from their city center properties.
But house prices have remained elevated ever since – despite mortgage rates soaring in response to the Federal Reserve‘s funds rate reaching a 22-year high.
The average rate on a 30-year mortgage is currently hovering at 6.77 – around double what they were two years ago, figures from Government-backed lender Freddie Mac show.
In the year to November 2023, property prices in Detroit increased 8.2 percent, according to latest data from the leading measure of US house prices
A recent report by CoreLogic shows how property prices have shot up in certain US metros
In a normal market this would be enough to dampen demand for homes and thus quash prices. However, several experts have noted that a widespread property shortage in the US has kept home values artificially high.
Whitney insists that there will be no house price ‘crash’ but rather an overdue correction.
And some markets will fare much better than others.
She said: ‘Every 60 years we see a similar kind of seismic shift in the US economy from an economic standpoint.
‘Today we’re seeing businesses shift into those tax-friendly states across the Sunbelt and in Texas, Tennessee and North Carolina. These are the housing markets where growth will persist.
Whitney insists that there will be no house price ‘crash’ but rather an overdue correction.
She notes that in the last decade homeowners have built up $21 trillion in equity in their homes – so any price falls is unlikely to seriously harm them.
And some markets will fare much better than others.
She said: ‘Every 60 years we see a similar kind of seismic shift in the US economy from an economic standpoint.
‘Today we’re seeing businesses shift into those tax-friendly states across the Sunbelt and in Texas, Tennessee and North Carolina. These are the housing markets where growth will persist.
- Meredith Whitney accurately predicted the 2008 financial crisis
- Now she claims US housing market is in the midst of a major shift
- It marks a reversal of the pandemic-inspired housing boom
America’s real estate landscape is in the midst of a major upheaval that will make homes more affordable to first-time buyers, claims a former Oppenheimer analyst.
Meredith Whitney earnt the nickname the ‘Oracle of Wall Street’ after accurately predicting the 2008 financial crisis.
Now she claims house prices are on the brink of decline after the pandemic inspired a real estate boom that saw the average property shoot up over $100,000 in value in less than four years.
However, she said the trend will be geo-specific with the likes of New York, New Jersey and Ohio worst-affected. By comparison, homes in Texas, Tennessee and Utah are among the states set to remain strong.
The shift will be driven by a surge in Baby Boomers downsizing into smaller properties – freeing up inventory and bringing costs down for first-time buyers, Whitney said.
Meredith Whitney, pictured, earnt the nickname the ‘Oracle of Wall Street’ after accurately predicting the 2008 financial crisis
In the year to November 2023, property prices in Detroit increased 8.2 percent, according to latest data from the leading measure of US house prices
A recent report by CoreLogic shows how property prices have shot up in certain US metros
She told DailyMail.com: ‘Around 90 percent of housing stock is owned by over 40s while 74 percent is by those over 50.
‘It makes logical sense that lots of these owners will start to downsize in the next decade. That’s almost 35 million homes – it’s a huge number to go through the system.
‘My advice to homeowners is: if you want to sell, you’re better off doing it sooner than later.’
During the pandemic the median US house price ballooned from $303,465 in March 2020 to $402,045 by December 2023, Redfin figures show.
Many families were embroiled in a so-called ‘race for space’ as they looked for bigger homes and gardens to spend lockdown. A widespread shift to working-from-home also unchained workers from their city center properties.
But house prices have remained elevated ever since – despite mortgage rates soaring in response to the Federal Reserve’s funds rate reaching a 22-year high.
The average rate on a 30-year mortgage is currently hovering at 6.77 – around double what they were two years ago, figures from Government-backed lender Freddie Mac show.
In a normal market this would be enough to dampen demand for homes and thus quash prices. However, several experts have noted that a widespread property shortage in the US has kept home values artificially high.
Whitney told DailyMail.com: ‘My advice to homeowners is: if you want to sell, you’re better off doing it sooner than later’
The average rate on a 30-year fixed home loan reached 6.77 percent, up from 6.64 percent last week, according to figures from Government-backed lender Freddie Mac
Data from Redfin shows that the typical US homeowner now spends twice as long in their properties as they did in 2005.
Today an owner can expect to spend 11.9 years in the same property, compared to 6.5 years two decades ago.
Whitney insists that there will be no house price ‘crash’ but rather an overdue correction.
She notes that in the last decade homeowners have built up $21 trillion in equity in their homes – so any price falls is unlikely to seriously harm them.
And some markets will fare much better than others.
She said: ‘Every 60 years we see a similar kind of seismic shift in the US economy from an economic standpoint.
‘Today we’re seeing businesses shift into those tax-friendly states across the Sunbelt and in Texas, Tennessee and North Carolina. These are the housing markets where growth will persist.
‘But New York, New Jersey, Ohio and Illinois will see an outmigration of population meaning there will be no growth in their housing markets.’