New Orleans home values slip as U.S. prices inch up
Add Axios as your preferred source to
see more of our stories on Google.
Home values in New Orleans are slipping even as prices rise in other parts of the country.
Why it matters: The city's dip underscores how local factors — from rising insurance premiums to limited demand — are shaping housing here differently than the rest of the U.S.
The big picture: New Orleans' average home value is $259,497, according to Zillow. It's down 1.1% year over year, based on June data.
- Nationally, the average home value is $367,369, up 0.2% year over year, Zillow says.
Stunning stat: Typical U.S. home values are roughly 46% above pre-pandemic levels, per Zillow.
- In New Orleans? Just 3.7%.
By the numbers: Home values in the New Orleans metro peaked in July 2022, Zillow spokesman Mark Stayton says, and have trended down since then.
- He points to mortgage rates doubling that year, dropping affordability.
- New Orleans has seen more homes hit (and sit on) the market than every major metro except Austin, he says. Rising insurance costs are also likely contributing to slower demand.
Zoom out: In half the country, home prices are still going up, and in the other half, they're falling.
- Aside from affordability and still-high mortgage rates, which have cratered demand nationwide, the price data shows that zoning laws, climate risks and economic vibes also play a big role.
- Ultimately, it comes down to supply. In places facing shortages of available homes and less newly constructed housing, prices are holding up.
State of play: Areas in the South, particularly Texas and Florida, that had lots of new construction over the past few years are seeing prices fall.
- And it's not just new homes; existing homeowners in these regions are also looking to sell and leave behind higher insurance costs and climate risks.
- "In places like Florida and Texas, they're kind of tired of hurricanes," says Chen Zhao, head of economic research at Redfin. These folks are putting their homes on the market.
Meanwhile: In the Midwest and Northeast, the price of a typical home keeps rising.
- These are regions where building new construction is much more difficult, due to zoning restrictions and lack of space.
Between the lines: "There's just this huge difference in supply between the Northeast and the South," Zhao says. "It's so much easier to do construction in the South. So you have a lot more new construction."
- New houses come to market a lot faster — while an existing homeowner can hold off on selling and wait out the slow market, a homebuilder cannot.
- Instead, builders have to put homes on the market — and be willing to take a lower price.
"It's almost as if America is two countries right now from a housing perspective," said Atlantic writer Derek Thompson, who drew attention to the dichotomy in a recent episode of his podcast.