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Last year was a tough one for the housing market due to a surge in mortgage rates. Despite the many eager buyers searching for homes, few properties were put up for sale as homeowners held on tight to their low mortgage rates. Builders couldn’t put homes up fast enough. Thus, the number of sales dropped.
Even as buyers grappled with near-record-low affordability, they couldn’t seem to catch a break. Home prices continued to rise across the country. They ticked up 1.2% when looking at the median list price and 3% when using the median price per square foot in 2023, according to Realtor.com® data.
But now, as the Federal Reserve hints at lower interest rates sometime in 2024, which would likely result in lower mortgage rates, the housing market could be poised for a rebound.
Plus, location is everything when it comes to the housing market. In some parts of the country, prices are rising by much more than the national average. In others, prices are coming down. That’s why buyers need to know where they will need to act fast—and where they might be able to negotiate with sellers.
To find the places with the biggest price increases and decreases in 2023, the Realtor.com data team dug into the data to identify the housing markets where prices are still going up quickly, and where prices have dropped the most over the past year.
To do this, we pulled together the median monthly list price per square foot for the 250 largest U.S. metropolitan areas from December 2022 through December 2023. We then ranked each metro, based on the percentage change.
We selected just one metro per state to ensure geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
In 2023, New England and the Upper Midwest experienced steady home price growth. The price per square foot shot up around 11% in New Hampshire, Vermont, and Ohio last year, according to Realtor.com data. They went up 10% in Massachusetts.
Meanwhile, the Mountain West saw the biggest slowdown in price growth. While the price per square foot still increased about 4.5% last year, that was down from a roughly 14% annual price hike in 2020, 2021, and 2022. This deceleration was most dramatic in Montana and Wyoming.
Price growth also slowed in Texas, where the price per square foot nudged up only about 1% in 2023, compared with roughly 12% each year in 2020, 2021, and 2022.
Meanwhile, certain cities around the U.S. experienced a surprising dip in prices. Below is a look at the housing markets with the largest price gains—and drops—in 2023.
The housing markets with the biggest price increases in 2023
1. Santa Barbara, CA
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Median home list price: $1,795,000*
Median list price per square foot: $899*
Year-over-year percentage change in price per square foot: 25.2%
2. Daphne, AL
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Median home list price: $529,900
Median list price per square foot: $348
Year-over-year percentage change in price per square foot: 24.5%
3. Utica, NY
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Median home list price: $229,000
Median list price per square foot: $145
Year-over-year percentage change in price per square foot: 23.5%
4. Atlantic City, NJ
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Median home list price: $599,000
Median list price per square foot: $365
Year-over-year percentage change in price per square foot: 20.6%
5. Joplin, MO
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Median home list price: $251,000
Median list price per square foot: $136
Year-over-year percentage change in price per square foot: 16.4%
The housing markets with the biggest price decreases in 2023
1. Green Bay, WI
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Median home list price: $424,800*
Median list price per square foot: $211*
Year-over-year percentage change in price per square foot: -8.7%
2. Lubbock, TX
Median home list price: $255,000
Median list price per square foot: $140
Year-over-year percentage change in price per square foot: -7.3%
3. South Bend, IN
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Median home list price: $220,000
Median list price per square foot: $139
Year-over-year percentage change in price per square foot: -6.3%
4. Macon, GA
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Median home list price: $225,000
Median list price per square foot: $120
Year-over-year percentage change in price per square foot: -4.1%
5. Billings, MT
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Median home list price: $484,900
Median list price per square foot: $210
Year-over-year percentage change in price per square foot: -3.1%
* Median price and median price per square foot figures reflect Realtor.com data from December 2023.
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