The Most Expensive and Cheapest Housing Markets in America
Written by
Kristopher Kane
Edited by
Amber Barkley
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The increase in U.S. home prices shows no signs of slowing down, but the scale and rate of housing cost increases can vary significantly from place to place. How and why prices rise underscores major differences in how the cost of living changes in different areas.
Those who study this rely on the S&P Case-Shiller Index, a report that monitors home prices in 20 major U.S. metropolitan areas. Data in the index sheds light on cities at both extremes — those where prices climb the most and those where they barely rise.
Rising Home Prices: An Overview
The Case-Shiller Index determines prices based on an index score of 100, assigned to each of the 20 cities covered by these monthly reports when monitoring first started in January 2000.
In places where housing prices have seen steep increases, that index score has risen to 300 or higher over the past two decades plus. Over the same period, other cities saw less significant index score increases to 200 or lower. Though living costs tend to closely follow housing costs, this isn’t always the case.
Home prices in the U.S. have steadily risen over the last 14 consecutive months, climbing 5% higher compared to the same period last year. One factor behind this trend is low inventory levels, which means housing is in short supply in some areas. A limited housing market means homebuyers have to spend more to compete, resulting in a trend of higher prices.
Part of the shortfall in available homes is due to homeowners with favorable mortgage rates. With high rates on new mortgages, savvy homeowners with lower fixed rates on their current homes are left with little incentive to sell.
As a result, many homeowners who benefit from 30-year fixed mortgages with rates under 3% are hanging on to properties they might otherwise have put on the market.
The Most Expensive Housing Market: San Diego
Home prices have increased more  in San Diego than anywhere else in the country, with a Case-Shiller Index score of 446.55 as of July.
Factors Behind San Diego’s Price Surge
San Diego has experienced rapid urban growth, which is reflected in its housing market. With over 1 million people now calling the southern California city home, the influx of new San Diegans has resulted in a rise in home prices so significant it outpaces any other region in the country.
The Cheapest Housing Market: Detroit
More than halfway across the country from San Diego, Detroit has seen the smallest increase in home prices among the 20 cities studied by Case-Shiller. The city’s index score was 191.19 in July, which reflects a housing market with stable or even stagnant price growth.
Factors Behind Detroit’s Market Conditions
Detroit is no longer the automotive hub it once was, and increasing unemployment, poverty and other shifting economic realities have kept the cost of living in the Motor City low, especially compared to rapidly growing cities like San Diego.
Detroit’s more affordable living costs may be the result of its decline in automobile manufacturing, but the silver lining in this dark cloud is opportunity. For potential residents, Detroit presents a rare chance to enjoy urban amenities without the hefty price tags found in economically booming cities like San Diego.
San Diego vs. Detroit: Cost of Living Cost Comparisons
- Cost of living, excluding rent: This is 25.2% more expensive in San Diego than in Detroit.
- Rent prices: Rents in San Diego are a staggering 114.7% higher than in Detroit.
- Restaurant prices: Dining out in San Diego is 15.4% more expensive than in Detroit.
- Grocery prices: These are 15.2% higher in San Diego than in Detroit.
- Local Purchasing Power: San Diego’s purchasing power is 2.9% lower than Detroit’s.
Editor’s note: Cost of living data was sourced from Numbeo and is accurate as of Nov. 27, 2024.
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