The median price for single-family homes in the U.S. dropped by $19,400 in the last three months of 2022, although prices for the year were up 4% overall, new data reveals.
While home-price growth decreased, prices were still elevated in 90% of the 186 metro areas examined by the National Association of Realtors (NAR). Of those, almost a fifth had double-digit price increases, primarily in the South.
Here's a look at the top 15 hottest markets in the U.S. right now, in terms of price growth in 2022:
Of the 15 cities where home prices grew the most, all but two are in the South, with six in Florida. This reflects a Southern migration trend that's been happening since 2020 and is related to a variety of factors, including affordability, increased remote work and older Americans retiring.
The metro area with the highest percentage of price growth is Farmington, New Mexico, where the median price for all homes is $261,200 — well below the national median of $378,700.
The small town of less than 50,000 residents is the only market where home prices increased by more than 20% in 2022.
On the other end of the spectrum, metro areas with the biggest price drops in 2022 were San Francisco and San Jose, California, with median home growth declining by 6.1% and 5.8%, respectively.
Nevertheless, demand for homes remains strong, even with rising mortgage costs pricing out buyers, says Lawrence Yun, NAR's chief economist.
"Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply," says Yun. "Moreover, there are signs that buyers are returning as mortgage rates decline, even with inventory levels near historic lows."