The U.S. has more ‘million-dollar’ cities than ever. Here’s where they are

(NEXSTAR) — The U.S. now has a record number of cities where the “typical” home costs more than $1 million, showing that housing costs continue to rise. New Zillow Report.

According to the analysis, as of February there were 550 cities in the country with median home prices above seven digits in the $1 million range, up from 491 cities a year ago.

California was the city with the most homes with assessed values ​​of more than $1 million, with a total of 210 cities. New York state had 66 cities, while New Jersey had the highest year-over-year increase with 49 cities.

Zillow notes that limited housing inventory continues to drive up home values. National Association of RealtorsPrices are expected to continue rising this spring.

“Affordability remains a big challenge for buyers, but that hasn’t stopped prices from rising,” Anushna Prakash, economic research data scientist at Zillow, said in a statement. “If mortgage rates drop later this year, as most expect, we could see a surge in home prices in million-dollar cities as more buyers jump in and prices rise,” she said.

Zillow said million-dollar cities were hit harder than the typical U.S. city when home prices fell in late 2022, but roughly mirrored national trends over the past year. . Home prices in these cities rose 4.6% year-on-year, slightly above the national average of 4.2%.

However, not all states experienced similar growth. Florida says goodbye to her three million-dollar cities: Siesta Key, Santa Rosa Beach, and Sanibel, and welcomes one of hers, Palmetto Bay, to her village. Texas had two losses in the Austin metropolitan area and one win in suburban Houston, while Dewey Beach in Delaware fell completely below the $1 million threshold.

Home prices aren’t the only challenge buyers face in this tight housing market. Average long-term mortgage rates in the U.S. have risen to their highest level in five weeks, a setback for prospective buyers during what is traditionally the busiest time of the year for home sales.

said Hannah Jones, senior economic research analyst at Realtor.com. Associated Press Mortgage rates are expected to likely remain in the 6.6% to 7% range until inflation shows convincing progress toward the Fed’s goals.

“Eager buyers and sellers are looking forward to more favorable housing conditions as the spring sales season begins,” Jones told the outlet. “However, mortgage rates offer little reassurance as economic indicators measured by both inflation and employment remain strong.”

The U.S. housing market has been depressed for two years due to sharply rising mortgage rates and a lack of homes for sale.

Despite this, the average interest rate on a 30-year mortgage is still much higher than it was two years ago, at 5%. As a result, many homeowners are discouraged from selling their homes because fixed-rate mortgages have been below 3% or 4% for more than two years.

Although many experts expect mortgage rates to decline slightly in the second half of this year, most forecasts expect the average rate on a 30-year mortgage to remain above 6%.

The Associated Press contributed to this article.