Just like the price of gas and milk, home values have skyrocketed in recent years. And nowhere is the price hike more pronounced than in the country’s major metropolitan areas, where home prices surged since the turn of the century. (These are the 20 most expensive suburbs for home buyers.)
According to Zillow’s Home Value Index, a typical, mid-tier home in the U.S. rose in value by 20.6% from March 2021 to March 2022, but even before that home prices have been steadily climbing. Mortgage data company Anytime Estimate notes that home prices have outpaced inflation over the past 50 years.
Since 1970, the inflation rate has climbed 644% as home values surged by 1,608%. In 2021 alone, home prices rose 20%, well above the inflation rate of 7.5%. In fact, Anytime Estimate calculated that if home values rose at the same rate as the inflation rate since 1970, the median home price would be a relatively affordable $177,788 instead of the current median of $408,100 as of the fourth quarter of 2021, according to the Federal Reserve Bank of St. Louis.
Anytime Estimate also considered housing price increases in the 50 largest metro areas since 2000. To determine the 50 metro areas where home values increased the most from 2000 to 2022, 24/7 Wall St. reviewed data from Anytime Estimate’s report Home Prices vs. Inflation: Why Millennials Can’t Afford Homes (2022 Data). The largest U.S. metro areas are ranked by the change in median home value from 2000 to 2022, from the smallest increase to the largest.
California metropolitan areas took the top five spots for the highest percentage increase in home values. San Jose, San Diego, Riverside, Los Angeles, and No. 1 San Francisco all saw home values soar by more than 260%. Tech hubs San Jose and San Francisco both sport median home values above $1 million, with San Jose topping out at $1.6 million and San Francisco coming in second at $1.4 million.
Two Midwestern cities recorded the lowest increase in home values among the metros on this list. Notably, home values in Cleveland and Detroit still rose by a significant 59.7% and 62.2%, respectively. So even in cities where home values rose by the lowest percentage, home prices have risen substantially. But it is not just home values that are rising. See the cities where rents take the highest share of income.
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