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Northeast and Midwest Cities Top List for Projected Home Price Gains

SANTA ANA, Calif., July 2, 2024 —Today, Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its 2024 Q2 VeroFORECASTSM, projecting an average nationwide appreciation of 3.2% over the next 12 months. This represents a marginal increase from the previous quarter’s forecast of 2.9%.

VeroFORECAST evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value.

Home price growth forecasts remain positive at 3.2%, despite conflicting housing market signals. While rising inventory provides more options for buyers compared to that in 2023, prices remain stubbornly high. This is partly due to the limited impact of the inventory increase, considering the pre-pandemic levels. Additionally, the rise in available properties might be in less desirable categories, leaving a shortage of the most sought-after homes in many markets.

On the other hand, the number of homes sold has dipped compared to last year. This is likely due to elevated mortgage rates and high home prices impacting affordability. This highlights a key market shift: increasing options for buyers, but continued pressure on affordability from high prices and interest rates. While demand has cooled slightly, a backlog of unmet demand, particularly among first-time buyers, remains a significant factor supporting price levels. Additionally, a robust job market with rising wages can further support price levels, even as mortgage rates remain elevated.

However, it is important to remember that the housing market is regional. National trends might not always translate directly to specific cities or regions. While some areas might see price stabilization or even slight decreases, others could remain very competitive with high prices.

House prices are rising fastest in the Northeast and Midwest because compared to the high prices on the West Coast and Sun Belt, these areas offer significantly more affordable housing options. This attracts first-time homebuyers and those priced out of pricier markets.

The Northeast and Midwest dominate the list of top housing markets for the next year, with projected appreciation ranging from 6.3% to 7.7%. These regions offer a blend of strong economies and relatively affordable housing, attracting buyers. Notably, two Pennsylvania cities (Lancaster, Reading), Rochester (NY), Manchester (NH), and six Midwestern metros (Akron & Mansfield, OH; Rockford, IL; Grand Rapids, MI; Topeka, KS; Lafayette, IN) lead the pack.

The 10 Strongest-Performing Markets Over Next 12 Months

Rank Markets Forecast Data
Q2 2024 - Q2 2025
1 READING, PA 7.7%
2 ROCHESTER, NY 7.5%
3 ROCKFORD, IL 7.3%
4 LANCASTER, PA 6.9%
5 LAFAYETTE-WEST LAFAYETTE, IN 6.8%
6 MANCHESTER-NASHUA, NH 6.6%
7 GRAND RAPIDS-WYOMING-KENTWOOD, MI 6.4%
8 TOPEKA, KS 6.4%
9 AKRON, OH 6.4%
10 MANSFIELD, OH 6.3%

The ten weakest housing markets are expected to see modest price declines (-1.0% to -1.8%) over the next year. These markets are diverse: some face high unemployment and struggle to attract residents, while others grapple with an oversupply of new construction dampening bidding wars. Additionally, rising property damage and insurance costs due to natural disasters in some Florida metros, coupled with potential affordability concerns in areas like Austin, are deterring buyers. This interplay of local supply, demand, economic, and climate factors underscores the importance of localized housing market trends.

The 10 Least-Performing Markets Over Next 12 Months

Rank Metropolitan Statistical Area (MSA Forecast Data
Q2 2024 - Q2 2025
1 LAKE CHARLES, LA -1.8%
2 LONGVIEW, TX -1.7%
3 BROWNSVILLE-HARLINGEN, TX -1.6%
4 WACO, TX -1.4%
5 CAPE CORAL-FORT MYERS, FL -1.4%
6 BEAUMONT-PORT ARTHUR, TX -1.3%
7 AUSTIN-ROUND ROCK-SAN MARCOS, TX -1.2%
8 ST. GEORGE, UT -1.2%
9 SAN ANTONIO-NEW BRAUNFELS, TX -1.1%
10 MYRTLE BEACH-CONWAY-NORTH MYRTLE BEACH, SC -1.0%
VeroFORECAST Methodology The quarterly VeroFORECAST reports to clients by subscription and to industry media in a summary overview. The current report is based on 325 Metropolitan Statistical Areas (MSAs) data, including 16,424 ZIP codes, 976 counties, and 82% U.S. residents. The report is a projected increase twelve months forward. Source: Veros Real Estate Solutions This information is intended for use by the media for economic reporting and should only be used for physical or digital publication or broadcast, in whole or in part, and must be sourced from Veros Real Estate Solutions. The company name must be visible on the screen or website if the data are illustrated with maps, charts, graphs, or other visual elements. For questions, analysis, interpretation of the data, or permission to reproduce, contact communications@veros.com. About Reena Agrawal, Research Economist Reena Agrawal has a Ph.D. in Economics from Vanderbilt University. She has fifteen years of experience in macroeconomic forecasting, sectoral research, feasibility studies of complex projects, and preparing reports for multi-national clients. About Veros Real Estate Solutions A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros’ services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit www.veros.com or call 866-458-3767. Media Contact Heather Zeller, Vice President of Marketing communications@veros.com (714) 415-6300 Original Source via Businesswire
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