Home prices continue to increase in most major U.S. cities, even as rising mortgage costs have discouraged buyers, a Realtor.com report finds.

The price gains are most felt in Greater Los Angeles, where home prices increased 23.8% over the 12 months ending in September 2023, according to Realtor.com data released Thursday.

In that time, the median home price in the 50 largest metros increased by a median of 5.76%, with only a handful of cities posting declines. The steepest decline was in San Antonio, where home prices fell by 2.8%.

The following metro areas had year-over-year median home price increases of 10% or more since September 2022:

  • Los Angeles: 23.8%
  • San Diego: 18.2%
  • Richmond: 15%
  • Cincinnati, Ohio: 14.6%
  • Providence, Rhode Island and Massachusetts: 14.6%
  • Boston: 14.1%
  • Columbus, Ohio: 12.1%
  • Rochester, New York: 11.4%
  • Pittsburgh: 10.6%
  • Chicago: 10.3%
  • Indianapolis: 10%

In almost all of these cities, prices leveled off or decreased in late 2022, only to rise again in 2023, according to Realtor.com data provided to CNBC Make It.

As is the case nationally, home prices have risen in these places because there are simply not enough homes built to meet demand, says Danielle Hale, chief economist at Realtor.com.

California has a longstanding housing shortage — perhaps the worst in the country — so home price growth in L.A. and San Diego isn’t overly surprising, especially considering price gains in recent years. Median home prices in L.A. and San Diego have increased by 38% and 48% since January 2020, respectively, based on Realtor.com’s active listings data.

As for some smaller markets with big price gains — such as Richmond, Cincinnati, Columbus and Rochester — the “commonality is that they’re relatively affordable, so demand remains relatively high,” says Hale.

Homes in these in these cities list for for less than $416,100, which is the U.S. median home price, according to U.S. Census data.

Even with higher costs, demand for homes exceeds supply

Despite 30-year fixed mortgage rates more than doubling from 3.2% to around 7.5% since January 2022, U.S. homebuyers are still purchasing homes at ever-increasing prices.

One explanation is that homebuyers who were holding out for lower mortgage rates might be returning to the market despite the higher costs, says Erin Sykes, chief economist and real estate agent at Nest Seekers International. These buyers might have been waiting for mortgage rates to go back down below 7%, but have since resigned themselves to a “higher for longer” mentality, she says.

“Counterintuitively, this has people shopping again, as today’s rates don’t seem too bad in comparison to the future potential rates,” Sykes says. “I’ve seen my personal transaction volume double over the last month.”

Housing data for Realtor.com’s September report is based on active inventory of existing single-family homes and condos in each metro area. Newly constructed homes are excluded unless the data is provided to Realtor.com by regional real estate associations.

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