Price Increases Complicating the Homebuying Process

Will the homebuying process become easier for potential and first-time buyers in 2024?

A new study conducted by the New Jersey Real Estate Network revealed the states where home prices have risen the most over the last year, which states are looking better for homebuyers, and which states need to improve.

Prospective buyers are now finding it harder to find good homes for sale within their budgets, making the homebuying process intense, stressful, and undoubtedly challenging for many.

Key Findings:

  • The average state experienced a 3.31% increase in home prices, with homebuyers spending around $11,077 more than in January for houses.
  • The state that saw the biggest increase was Connecticut, with the average house price rising by nearly a tenth (9.56%).
  • Louisiana was the state with the lowest change, being one of five states where homes dropped in price, decreasing 2.19% in value on average.

The study found that Connecticut is the state that saw the biggest increase in home prices, revealing a 9.56% increase throughout last year. The average home price in the Constitution State currently sits at around $381,620—nearly $30,000 more than the current U.S. average of $351,738—and has risen by $33,293 since the start of 2023.

In second place is Maine, with an increase of 8%. Homes in the Pine Tree State are currently valued at around $385,019 on average, rising over $28,504 in price since January 2023.

New Hampshire—the Granite State—was the state with the third highest increase, experiencing an increase of $31,160 in home prices and a 7.49% increase.

New Jersey came in fourth place, experiencing a significant increase of 7.43% in the average home price. Homes in the Garden State were $34,283 cheaper in January 2023, with the average house price estimate now being $495,469.

Ranking fifth, Rhode Island experienced a 7.1% rise in home prices, a jump of $28,874 for prospective homebuyers.

Massachusetts came in sixth with the highest increment, experiencing a 6.97% jump. The Bay State had the largest monetary increase out of all states, with over $38,335 added to the average home price last year.

Wisconsin ranked seventh with a rise of 6.09%, followed by Vermont with 5.81%. In ninth place was Ohio—the Buckeye State—with a rise of 5.53%, resulting in homebuyers spending $11,331 more at the end of the year compared to January.

Illinois claimed the tenth and last spot with an average raise of 5.42%, nearly two-thirds (63.7%) above the average rise.

Top 10 States with the Biggest Percentage Increase:

  1. Connecticut
  2. Maine
  3. New Hampshire
  4. New Jersey
  5. Rhode Island
  6. Massachusetts
  7. Wisconsin
  8. Vermont
  9. Ohio
  10. Illinois

In comparison, the state that saw the biggest decrease in house prices is Louisiana. The Pelican State experienced a percentage decrease of 2.19%, making homes around $4,370 cheaper in December compared to the start of the year.

Coming in second place is Idaho, with a decrease of 0.75%, leaving many homebuyers in the Gem State satisfied.

The third-cheapest was Texas, with a price drop of an average 0.42%, saving homebuyers around $1,241 per purchase in the Lone Star State.

With a price drop of 0.36%, North Dakota comes in fourth, followed by Nevada in fifth with a 0.11% decrease.

Top 10 States with the Lowest Percentage Increases in Home Prices:

  1. Louisiana
  2. Idaho
  3. Texas
  4. North Dakota
  5. Nevada
  6. Utah
  7. Colorado
  8. Mississippi
  9. Hawaii
  10. Arizona

A spokesperson from New Jersey Real Estate Network said: “The spike in housing prices across certain states results from a mix of factors. Economic vitality, job growth, and population influx can drive demand, while supply constraints and low interest rates amplify the increase in prices. Despite this, prospective buyers in 2024 have much to look forward to, and the desire to own your own home is driving many to continue saving for their dream house.”

While homebuying remains a challenging process for many, whether financially or with limited options, the American Dream isn’t quite completely out of reach.

What’s to come in 2024 may offer potential and first-time homebuyers the opportunity to attain their dream of homeownership.

To read the full report, including more data and methodology, click here.

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Demetria C. Lester

Demetria C. Lester

Demetria C. Lester is a reporter for MortgagePoint (formerly DS News and MReport) with more than eight years of writing and editing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is a jazz aficionado, Harry Potter fanatic, and likes to read. She can be reached at demetria.lester@thefivestar.com.
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