According to a recent report from the National Association of Realtors (NAR), home prices across major metro areas in the United States are experiencing a significant rebound in 2024, with 93% of areas indicating gains. This surge in prices is mainly attributed to the pent-up demand for homes, as the housing supply fails to meet the rising demand.

Out of the 223 major metro markets analyzed by NAR, approximately one-third witnessed double-digit price increases in the first quarter of 2024. Overall, existing single-family home prices in the U.S. have risen by 5% compared to the previous year. In April, the median home price reached $389,400, highlighting the remarkable turnaround.

Lawrence Yun, the chief economist at NAR, points out that the escalating prices are primarily a consequence of a shortage of available housing. "In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand," Yun says. This imbalance has led to an increased competition among buyers, driving up prices across various metro areas.

One significant factor contributing to the surge in home prices is the dip in mortgage rates. After reaching a peak of 7.79% in November 2023, 30-year fixed mortgage rates have fallen down closer to 6.6% in 2024. This decrease has further stimulated the housing market and provided buyers with lower-cost financing options.

The report also highlights the top ten metro areas with the highest price gains so far in 2024. These cities include Fond du Lac, Wisconsin, with a home price gain of 23.7% and a median sale price of $232,200. Similarly, Rockford, Illinois, which suffered from the mortgage crisis in 2008, has rebounded with a price gain of 18.4%.

The greater New York area is also experiencing a significant increase in home prices, with an 18.4% gain. This surge is largely due to the ongoing demand and a shortage of available homes in the bustling region. Overall, the northeast region has witnessed the highest increase in single-family home prices, with an 11% rise in the first quarter of 2024.

Most of the metro areas with the highest price gains are smaller cities that offer relatively affordable homes compared to neighboring major cities. These areas include Fond du Lac and various Illinois cities. Despite the price surges, the median home prices still remain significantly lower compared to nearby metropolitan areas.

As the housing market continues to thrive in 2024, analysts expect prices to remain on an upward trajectory. However, concerns regarding the housing supply shortage and affordability persist. Both buyers and sellers must navigate these challenges as they participate in the evolving real estate landscape.

In conclusion, the NAR report reveals that home prices are experiencing a substantial rebound in 2024, with a majority of major metro areas reporting gains. The surge in prices is largely due to pent-up demand and a shortage of available housing. With mortgage rates decreasing and various regions witnessing record gains, the housing market continues to showcase resilience and potential for further growth in the coming months.