Detroit has surpassed Miami as the fastest-growing housing market, according to a new report from financial services firm CoreLogic.
The legendary Motor City, which fell from its heights amid the decline of the auto industry, recorded the highest year-over-year home price growth rate of 8.7% among the country's 20 metropolitan areas as of November 2023. CoreLogic reported on tuesday.
Meanwhile, home prices in Miami rose 8.3% year-on-year.
“Detroit remains one of the most affordable large cities with a median home price of less than $200,000,” Dr. Selm Hepp, chief economist at CoreLogic, told the Post.
The Big Three automakers, General Motors, Ford and Jeep maker Stellantis, all based in Detroit, have been developing EV products in recent years to compete with Austin-based rival Tesla.
Miami has been the most highly appraised city in the U.S. for the past 16 months, with an influx of residents boosting home prices due to eased pandemic restrictions, a warmer climate and lower costs of living and lower taxes.
Charlotte, North Carolina ranks third on the list of fastest-growing housing markets, with prices up 7.4% from November 2022, according to CoreLogic calculations.
The overall U.S. housing market rose 5.2% year over year in November, even as the average 30-year mortgage rate reached 8% for the first time since 2000, according to CoreLogic's Home Price Index.
The figures, released monthly but with a five-week lag, marked the strongest annual growth rate since January 2023.
Mortgage rates are down to 6.62%, according to mortgage company Freddie Mac, but a report from Redfin shows that housing affordability has plummeted over the past year, making it difficult for average households to consider it affordable. Only 15.5% of homes for sale were sold.
This rate is significantly lower than the typical 40% before the pandemic homebuying boom and the 20.7% recorded in 2022.
The drop in affordability is partly due to a decline in the number of properties (down 21.2% through 2023), but is more primarily a result of this year's sharp rise in mortgage rates and subsequent home price increases, Red said. Finn reported.
The average monthly mortgage payment is now a whopping 52% higher than the average monthly rent for a house or apartment, as the housing market threatens to price out middle- and lower-class buyers, commercial real estate companies say. CBRE reported in October.
Traditionally, the monthly interest rate on a mortgage was equal to or less than the monthly rent payment on an apartment. From 1996 he was there until mid-2003. This is because owners tend to put more cash into their homes than tenants due to costs such as repairs and renovations.
For reference, prior to the 2008 market crash, mortgage premiums peaked at 33% in the second quarter of 2006.
But rising debt costs, high interest rates on benchmark 30-year mortgages, and declining housing supply have turned the scenario upside down.
These same factors give homeowners an incentive to keep their homes, since even downsizing to take advantage of a lower sticker price doesn't make sense given rising mortgage rates.
To avoid stubbornly high mortgage rates — interest rates are double what they were in January 2022, when interest rates began to rise rapidly. The Federal Reserve has begun an aggressive tightening regime. Approximately 68% of wealthy buyers with deep liquid assets pay cash for a home in New York City.
According to , cash sales in the Big Apple accounted for a staggering 67.9% of transactions in the fourth quarter of 2023. Latest Quarterly Survey of Manhattan Sales From appraiser Miller Samuel and securities giant Douglas Elliman.
This figure typically hovers around 50% and “accounts for more than two-thirds of total sales, reaching an all-time high in market share,” the report said.
