DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1520335
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 76 May 2024 J O U R N A L Reserve cuts interest rates, which would bring down the cost of getting a mortgage." Mortgage payments are near their all-time high due to rising prices and elevated mortgage rates: The median U.S. home sale price is up about 5% from a year ago, and mortgage rates are hovering around 7%, not far from the 23-year high of roughly 8% hit in October. The typical household earns roughly $30,000 less than it needs to afford the median-priced home, and rents are on the rise again. SHARE OF 'MILLION-DOLLAR' U.S. CITIES REACHES RECORD HIGH A ccording to new Zillow research, there are now some 550 "mil- lion-dollar" cities in the U.S.— where the average home is valued at $1 million or more—reaching an all-time high. Compared to a year ago, there are now 59 more million-dollar cities, which reverses the decline in property values that occurred about this time last year. Although difficulties with affordability have hindered purchasers, a tight housing market with few available properties has kept home values growing. The good news for homebuyers in the market this summer is that there are more new listings available as the effects of "rate lock," which happens when homeowners are financially motivated to stay in their current home due to the low interest rate on their current mortgage, are lessening. Additionally, there may be a second wave of buyer demand this summer if lower mort- gage rates are anticipated later this year. "Affordability is still a big challenge for buyers, but that hasn't stopped prices from growing," said Anushna Prakash, Eco- nomic Research Data Scientist at Zillow. "Buyers this spring are going to see more options to choose from, but they'll also see a lot of other buyers wandering through the same open houses. Competition will stay fierce, especially for the most attrac- tive and well-priced homes. If mortgage rates drop later this year, as many expect, we may see a surge in million-dollar cities as even more buyers jump in and drive prices higher." Top 10 Metro Areas With the Most Million-Dollar Cities: 1. New York (106 in 2024 vs. 82 in 2023) 2. San Francisco (69 vs. 69) 3. Los Angeles (63 vs. 56) 4. Boston (23 vs. 19) 5. San Jose, CA (18 vs. 18) 6. Seattle (17 vs. 15) 7. Miami-Fort Lauderdale, FL (17 vs. 16) 8. Washington, D.C. (14 vs. 12) 9. San Diego (10 vs. 7) 10. Santa Maria-Santa Barbara, CA; Santa Rosa, CA (9 vs. 9) Top 10 U.S. States With the Most Million-Dollar Cities: 1. California (210 homes in 2024 vs. 198 in 2023) 2. New York (66 vs. 54) 3. New Jersey (49 vs. 35) 4. Florida (32 vs. 34) 5. Massachusetts (31 vs. 27) 6. Colorado (21 vs. 21) 7. Washington (18 vs. 16) 8. Hawaii (17 vs. 16) 9. Texas (14 vs. 15) 10. Maryland (10 vs. 8) Share of Million-Dollar Homes Steadily on the Rise Over the past year, million-dollar cities have mostly followed the national market, even though they were more negatively impacted by the decline in property values in late 2022 than the average U.S. city. The average U.S. home has increased in value by 4.2% in the past year. The typical annu- al increase in home value in million-dollar cities today is 4.6%. There are 210 million-dollar cities in California, more than in the following five states put together. With the addition of 14, New Jersey now boasts the most million-dollar cities in the last year. The only states with a net decrease in million-dollar cities over the previous year were Florida, Texas, and Delaware. Florida gained the Village of Palmetto Bay, close to Miami, but lost three million-dollar cities: Siesta Key, Santa Rosa Beach, and Sanibel. Texas gained Bellaire, a city outside of Houston, and lost two wealthy Austin communities, Sunset Valley and Volente. The "Big Apple" Stands Above the Rest With 106 million-dollar cities—24 more than a year ago—the New York City metro region, which encompasses portions of New Jersey and Pennsylvania, has the highest number of these cities. Los Angeles is next with 63, while San Francis- co is next with 69. The eleven largest metro areas in terms of million-dollar cities are located in coastal states. The two largest metropolises in states that don't border either coast are Denver, with seven million-dollar cities, and Dallas, with eight.