Home prices in these 9 cities are up more than 10% since low mortgage rates

But it’s not necessarily good news for homebuyers. Cheaper monthly payments have brought an influx of new buyers to the market — and now prices are rising in some areas as supply can’t keep up with demand, according to Redfin.

The firm analyzed home price changes in the top 50 U.S. metro areas and found that nationwide, year-over-year, home prices rose 6.7%, outpacing the national annual increase of 4.2% in August 2023.

According to Redfin Chief Economist Sheharyar Bokhari, prices are rising because falling mortgage rates have boosted demand for homes while supply remains low. The number of homes for sale is still nearly 30% lower than before the pandemic, despite a 16.7% increase from a year ago.

This is, however, only the beginning. Prospective homebuyers should prepare to see even more price increases, Bokhari believes.

“If mortgage rates fall further this fall — and we expect they will — price growth is likely to accelerate as more potential homebuyers come off the sidelines,” Bokhari said.

Economists have warned about the sensitivity of the housing market to demand shocks. Skylar Olsen, Zillow’s chief economist, told Business Insider in an interview last month that lower mortgage rates would prompt homebuyers to snap up existing inventory and lock up the housing market again. Olsen believes that supply-side policies to build more affordable and affordable housing must be implemented before the housing market can return to a healthy state.

Top 9 cities where prices rose the most

Home values ​​are rising faster in some cities than others, with 30 of the 50 most populous U.S. metropolitan areas seeing price increases in the past month. Year over year, prices rose in nearly every one of the top 50 metro areas. Only two cities – San Antonio and Austin – saw values ​​decline.

Below are the 9 cities where home prices rose the most over the past year, rising at double-digit rates. Each city’s year-over-year and month-over-month price increases starting in August 2024 are included.