House Prices Are Now Rising Fastest in These 15 U.S. Metro Areas

House prices across the U.S. rose 17.7 percent in the second quarter of 2022 compared to the same period last year, according to the Federal Housing Finance Agency House Price Index (FHFA HPI) released on Tuesday.

The FHFA HPI is a collection of house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities.

Compared to the first quarter of the year, home prices went up 4.0 percent between April and June.

Housing market
U.S. house prices rose 17.7 percent from the second quarter of 2021 to the second quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA). In this photo, construction workers build new homes in Alhambra, California, on August 16, 2022. FREDERIC J. BROWN/AFP via Getty Images

Prices rose across all 50 states and the District of Columbia and in all 100 largest metropolitan areas identified by the FHFA, with the highest price increases in these 15 urban centers:

  1. North Port-Sarasota-Bradenton, Florida (36.4 percent year-on-year and 8.2 percent quarter-on-quarter)
  2. Cape Coral-Fort Myers, Florida (36.0 percent year-on-year and 7.4 percent quarter-on-quarter)
  3. Raleigh-Cary, North Carolina (31.1 percent year-on-year and 7.0 percent quarter-on-quarter)
  4. Tampa-St. Petersburg-Clearwater, Florida (29.6 percent year-on-year and 6.2 percent quarter-on-quarter)
  5. Jacksonville, Florida (29.0 percent year-on-year and 6.4 percent quarter-on-quarter)
  6. Nashville-Davidson--Murfreesboro--Franklin, Tennessee (28.2 percent year-on-year and 7.0 percent quarter-on-quarter)
  7. Phoenix-Mesa-Chandler, Arizona (27.8 percent year-on-year and 6.6 percent quarter-on-quarter)
  8. Fort Lauderdale-Pompano Beach-Sunrise, Florida (26.9 percent year-on-year and 6.0 percent quarter-on-quarter)
  9. West Palm Beach-Boca Raton-Boynton Beach, Florida (26.4 percent year-on-year and 3.4 percent quarter-on-quarter)
  10. Orlando-Kissimmee-Sanford, Florida (26.3 percent year-on-year and 5.2 percent quarter-on-quarter)
  11. Miami-Miami Beach-Kendall, Florida (26.1 percent year-on-year and 8.4 percent quarter-on-quarter)
  12. Las Vegas-Henderson-Paradise, Nevada (26.1 percent year-on-year and 6.1 percent quarter-on-quarter)
  13. Knoxville, Tennessee (25.6 percent year-on-year and 4.9 percent quarter-on-quarter)
  14. Dallas-Plano-Irving, Texas (25.6 percent year-on-year and 6.3 percent quarter-on-quarter)
  15. Atlanta-Sandy Springs-Alpharetta, Georgia (25.0 percent year-on-year and 6.1 percent quarter-on-quarter)

As the list above suggests, house prices increased the most in Florida (29.8 percent), Arizona (25.5 percent), North Carolina (25.2 percent), Montana (24.9 percent) and Tennessee (24.3 percent).

Home prices have skyrocketed in Florida, especially the south and southeast, as an influx of new residents have met a huge inventory shortage in the state.

On the other hand, the lowest house price appreciation was reported in the District of Montana (5.2 percent), North Dakota (10.6 percent), Louisiana (10.8 percent), Minnesota (11.3 percent) and Maryland (12.0 percent).

But the booming housing market has been experiencing the first signs of a slowdown in the past few weeks, as skyrocketing prices and soaring mortgage interest rates have combined to make the purchase of new and existing homes unaffordable for many potential homebuyers.

The trend is reflected on the FHFA house price index for the second quarter. The agency's seasonally adjusted monthly index for June was up only 0.1 percent from May.

"Housing prices grew quickly through most of the second quarter of 2022, but a deceleration has appeared in the June monthly data" said William Doerner, supervisory economist in FHFA's Division of Research and Statistics.

"The pace of growth has subsided recently, which is consistent with other recent housing data."

As demand for homes is waning and sales have started to decline, analysts expect home prices to decrease, in a cooling down of the housing market which would be key for the Federal Reserve's plan to lower inflation to work.

"The big takeaway from the June CS report is that home price appreciation (HPA) continues to moderate from peak levels reached earlier in the year," Al Otero, portfolio manager at Armada ETF Advisors, told Newsweek.

"One forecaster we follow believes that HPA will be in the single digits by year end 2022, and could turn down modestly into the first half of 2023, as the Federal Reserve continues to tighten and economic growth moderates," he said.

"Demand for single-family homes remains high, but many individuals and institutional investors in single-family homes have paused, with the expectation that prices will moderate."

The next FHFA's HPI, revealing house prices changes in the third quarter of the year, will be released on November 29.