U.S. home prices edged higher in July, with once-struggling Midwest markets benefiting the most.
New data from Homes.com revealed that home prices rose 2.1% last month compared to July 2024. The median price for all properties — single-family homes, townhouses and condos — increased $8,000 to $393,000.
The July gain is slightly above the 2% appreciation average over the previous six months.
Elevated mortgage rates and growing numbers of homes for sale could keep moderating national home prices in the second half of the year, according to Erika Ludvigsen, national director of residential analytics at Homes.com. The overall appreciation is likely to remain positive, even as prices in some individual markets fall, she said.
Affordability issues could deter consumers nationwide, but the outlook varies, with some regions clearly shifting toward a buyer's market, Ludvigsen noted.
"The West and South may offer more opportunities for buyers, especially in metros where inventories are growing and prices are cooling," she said in an interview. "Market conditions may be more challenging for buyers in the Northeast and Midwest as supply remains tighter and price levels are appreciating at higher rates than in other parts of the country."
Midwest markets surge
Of the nation's 40 largest markets, Cleveland led with a 14.1% jump in prices last month from the prior year, the data shows. Six other Midwest markets — Indianapolis; St. Louis; Cincinnati; Kansas City, Missouri; Detroit; and Milwaukee — ranked in the top 10, with growth of least 5.5%.
"The Midwest did not experience the sharp home price increases as the South post-COVID and is now faring better with more stable pricing and market fundamentals," Ludvigsen said.
In Ohio, buyers are attracted to the affordability, agents say, and that's driving up values.
“Demand still remains pretty steady, and there’s still not a lot of options for people,” Cleveland-area agent Kristin Baum of Engel & Volkers told Homes.com.
Agent Adam Kaufman of Howard Hanna, a lifelong Cleveland resident, told Homes.com that the city has undergone a reputation revamp in the past 15 years, going from the nickname “Mistake on the Lake” to an arts and entertainment hub with a strong healthcare industry.
It’s brought back a return of many former Clevelanders with young families who left for cities such as Chicago, or states including California, New York and Texas.
“They’re coming from other markets where the real estate is so much more expensive that to them, Cleveland is still incredibly affordable,” said Kaufman.
Prices fall in Texas
Among markets with declining prices, San Antonio posted the largest annual drop at 5%. Austin, Texas', median fell 4.2%, and Houston's dipped 2.9%.
Eight other metropolitan areas, including Miami; Inland Empire, California; and Denver, also had median price drops.
