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In a housing market featuring double-digit annual home appreciation, it’s near impossible to find an area where home prices aren’t rising.

According to CoreLogic, home prices increased 17.2% nationwide from June 2020 to June 2021 — the greatest year-over-year increase since 1979. Zero states saw a decline in prices, and all but six reported a year-over-year increase of more than 9%.

If rising home prices are inescapable, the next best thing is finding where prices are rising the slowest.

Bottom 20 metro areas for annual home appreciation

The Federal Housing Finance Agency’s (FHFA) quarterly Housing Price Index (HPI) tracks changes in home prices for the 100 largest metropolitan areas. While the list contains surprises, it also shows just how widespread and unrelenting 2021 price increases have been.

The following metro areas ranked in the bottom 20 for seasonally adjusted annual appreciation for the first quarter of 2021.

Metro area 2021Q1 Annual appreciation Median sale price June 2021*
Urban Honolulu, HI-0.65%$685,000
Baton Rouge, LA6.43%$245,000
San Francisco-San Mateo-Redwood City, CA6.45%$1,509,000
Little Rock-North Little Rock-Conway, AR7.06%$211,000
Philadelphia, PA7.86%$280,000
New Orleans-Metairie, LA7.91%$283,000
Columbia, SC9.10%$215,000
St. Louis, MO9.13%$238,000
Houston-The Woodlands-Sugarland, TX9.45%$312,000
San Jose-Sunnyvale-Santa Clara, CA9.59%$1,400,000
Chicago-Naperville-Evanston, IL9.61%$320,000
New York-Jersey City-White Plains, NY-NJ9.73%$663,000
Lake County-Kenosha County, IL-WI9.90%$325,000
Orlando-Kissimmee-Sanford, FL9.92%$325,000
Oklahoma City, OK10.00%$230,000
Charleston-North Charleston, SC10.09%$360,000
Oxnard-Thousand Oaks-Ventura, CA10.15%$800,000
Baltimore-Columbia-Towson, MD10.19%$352,000
Birmingham-Hoover, AL10.49%$267,000
Virginia Beach-Norfolk-Newport News, VA-NC10.52%$290,000
*Based on the latest housing data from Redfin.

A mixed bag

Immediately apparent is that aside from Honolulu -- an outlier in many regards -- the lowest appreciation rate was 6.43%. That is remarkable, considering the national average was just 3.8% in 2019.

This list also shows how widespread price increases are in 2021. Every single metro area on the mainland is experiencing higher than average home appreciation and just 13 showed price increase percentages in the single digits.

And those 13 are an incredibly mixed bag.

First, there are the high-cost coastal metros -- New York City, San Francisco, and San Jose -- where presumably prices are already so high it’s difficult to rise further.

Then there are the small metros like Little Rock, Columbia, Baton Rouge, and St. Louis. Home prices are well below the national median in these markets, so any increase in price is going to make a greater splash than it would in a high-cost market.

For example, homes in San Francisco and Baton Rouge appreciated at nearly the same rate from 2020-2021. However, a 6.45% increase from the current median sale price in San Francisco is over $97,000, while a 6.43% increase from the median sale price in Baton Rouge is around $16,000.

In between these extremes are major metros like Houston, Chicago, and Philadelphia, where home prices are below the national median of $387,000 and appreciating at some of the lowest rates in the nation. For homebuyers looking to buy near a major city without paying pandemic-inflated prices, this may be as good as it gets.

The flip side of annual home appreciation

While rapid appreciation is squeezing first-time and low-budget homebuyers out of the market, it also presents an opportunity for fast and lasting home equity.

CoreLogic predicts that year-over-year price increases are peaking now and will fall sharply heading into 2022 -- but that doesn’t mean home prices will stop rising. It just means they won’t rise as fast.

Today’s double-digit annual appreciation is a result of low inventory, low interest rates, and pent-up pandemic demand. As these factors normalize, so will home prices. But with a massive wave of millennials entering prime homebuying age, overall housing demand is likely to remain high for several years.

Homebuyers who buy in 2021 may have to reconcile with the fact they’re paying as much as 30% over last year’s prices (in extreme markets like Boise, ID). However, that may be preferable to delaying further as prices continue to rise and missing out on a year of appreciation and home equity.

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