Prices in the U.S. housing market have exploded in the past year. According to the carefully followed S&P Case-Shiller home price index, home prices rose over 19% recently, and in some markets, they moved higher by almost 30% compared to 2021. Other research shows that in other markets, prices have jumped even more year over year.
The reasons are straightforward. Mortgage rates are near historic loans, allowing homebuyers to stretch their dollars. People have relocated from expensive coastal cities like New York and San Francisco to less expensive cities inland. Many of these places also are perceived to have a better quality of living. The ability to relocate has been helped by the fact that millions of Americans now work from home because of the COVID-19 pandemic.
Housing in tourism-dependent Ketchum, Idaho, is so scarce the mayor recently floated an idea of establishing a tent city for local workers who are unable to find permanent quarters, according to The Wall Street Journal. The city council rejected the proposal, but it illustrates the lengths to which officials are willing to go to deal with the housing crunch.
To identify the state that had the largest home price increases in 2020, 24/7 Wall St. reviewed the price insights report published July 6 from property information company CoreLogic. The ranking is based on the year-over-year change in home prices based on CoreLogic’s home price index for May 2020 and May 2021.
For the purpose of comparison, we obtained each state’s annual median home value from the U.S. Census Bureau’s 2019 American Community Survey. The latest year for which such data is available is 2019.
Those who own non-mortgaged homes certainly have become wealthier than they were last year. According to CoreLogic, the national average increase in home equity increased $30,000 in May 2021 compared to May 2020. In some markets, that figure is higher, while buyers fight local bidding wars over limited available housing.
As home value continues to appreciate, market watchers see no end in sight. According to the Mortgage Bankers Association, however, housing starts are expected to rise considerably over the next two years, which should provide some relief to near-future homebuyers.
The state where home prices have gone up the most is Idaho. Between May 2020 and May 2021, home prices rose 30.3%. The median home value in 2019 was $255,200, the 20th highest among all states.
Spokane, Washington, and neighboring Coeur d’Alene, Idaho, share one of the hottest housing markets in the country. As mentioned, some prices in the town of Ketchum in central Idaho are so high that local workers are struggling to find housing.