Detroit raced past Miami as the fastest-appreciating housing market, according to a new report from financial services company CoreLogic.
The fabled Motor City, which has fallen from its heights amid the auto industry’s decline, posted the highest year-over-year home price increase of the country’s 20 tracked metro areas as of November 2023, at 8.7%, CoreLogic reported on Tuesday.
The cost of homes in Miami, meanwhile, advanced 8.3% year over year.
“Detroit remains one of the most affordable large metros with median home price at less than $200,000,” Dr. Selm Hepp, the chief economist at CoreLogic, told The Post.
The Big 3 automakers — General Motors, Ford and Jeep-maker Stellantis — are all based in Detroit, and have developed EV offerings in recent years to compete with Austin-based rival, Tesla.
Miami had been the highest-appreciating the US for the previous 16 months as home prices soared from an influx of residents — both for its loose pandemic restrictions and warm weather, along with its lower cost of living and tax breaks.
Charlotte, NC, was third on the list for fastest-appreciating housing market, per CoreLogic’s calculations, with prices advancing 7.4% from November 2022.
The US housing market overall shot up 5.2% year-over-year in November, according to CoreLogic’s home price index — despite the average 30-year mortgage rate hitting 8% for the first time since 2000.
The figure, which is released monthly but on a five-week lag, marks the strongest annual growth rate since January 2023.
Though mortgage rates have cooled to 6.62%, according to home loan corporation Freddie Mac, housing affordability has plummeted over the past year — when just 15.5% of homes for sale were considered affordable for the typical household, according to a report from Redfin.
The percentage marks a steep drop from the typical 40% seen before the pandemic-fueled homebuying boom began, and the 20.7% figure recorded in 2022.
The decline in affordability is partially due to a drop in listings — which fell 21.2% over the course of 2023 — and more largely a result of the spike in mortgage rates and subsequent rise in home prices this year, Redfin reported.
As the housing market has threatened to price out middle- and lower-class buyers, the average monthly mortgage payment rose to be a whopping 52% higher than the average monthly rent on a house or apartment, commercial real estate firm CBRE reported in October.
Traditionally, monthly mortgage rates cost the same or less than monthly rent payments on an apartment — which had been the case from 1996 to mid-2003 — since owners tend to put more cash into their homes than tenants because of expenses like repairs and renovations.
For reference, in the lead up to the 2008 market crash, the mortgage premiums peaked at 33% in the second quarter of 2006.
However, the script was flipped due to the increased cost of debt, high rates on a benchmark 30-year home loan and low housing supply.
To skirt around stubbornly-high mortgage rates — which is still double it was in January 2022, when rates started surging as the Federal Reserve began its aggressive tightening regime — some 68% of wealthy buyers with ample liquid assets are paying cash for homes in New York City.
Cash sales in the Big Apple made up a staggering 67.9% of transactions in the fourth quarter of 2023, according to the latest quarterly survey of Manhattan sales from appraisers Miller Samuel and brokerage giant Douglas Elliman.
The figure, which usually hovers around 50%, “exceeds two-thirds of all sales to reach a record-high market share”,” according to the report.”