The United States is home to one of the biggest and most dynamic housing markets in the world. In 2023, the market was valued at 2.9 billion U.S. dollars in
– a figure only comparable with the Chinese market. House prices in the United States have grown steadily since 2012, with the
hitting nearly 18 percent during the housing boom in 2021. Nevertheless, price growth has been muted by the deteriorating housing affordability – a complex interplay between insufficient housing supply, income growth, and growing housing costs.
Where have homes appreciated the most?
Despite a slowdown, house prices continue to grow across most states. Rhode Island, Vermont, and West Virginia exhibited the
strongest annual home appreciation in the fourth quarter of 2023, with prices rising by over 10 percent. Only one state, Hawaii, and the District of Columbia and Hawaii observing a small price decline. In 2023, the tropical island state experienced a 3.4 percent decline in home values. Nevertheless, it remained the state with the most expensive housing as of February, with the t
ypical single-family home selling for 967,000 U.S. dollars. In Washington D.C., the decline was even lower, at about one percent, while the typical home costing nearly 718,000 U.S. dollars. While the average property prices in different states differ greatly, property values vary even more across metros. In San Jose-Sunnyvale-Santa Clara, California, the
median sales price of a single-family home amounted to 1.8 million U.S. dollars in 2023. Just 150 miles away from San Jose, in Fresno, the average price for a comparable property was 410,000 U.S. dollars.
Homebuyer sentiment and affordability
While house prices have continuously grown in recent years, incomes have not followed at the same pace. That means that for aspiring homeowners, purchasing a home has become
increasingly unaffordable. Since 2021, soaring inflation and the increase in borrowing costs have further eroded affordability. This has led to a dramatic decline in
homebuyer sentiment and Americans across all age groups agreeing that the current timing was not good for a home purchase. A 2023 survey among non-homeowners shows that respondents identified the high costs of living, insufficient savings, and low income as the leading
reasons preventing them from buying a home.
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