Top 10 Areas with Lower Home Value Growth in 2023 Housing Market

Buying a home is often seen as a dual-purpose investment, offering both a place to live and potential financial gain. Over the years, U.S. homeowners have generally experienced rising home values, with an average annual increase of 4.3% between 1991 and 2022, according to Credit Karma citing Federal Housing Finance Agency data. However, the real estate market’s performance varies across regions, influencing appreciation rates, and, despite a national average increase of 18.8% in home values in the year ending April 2022, ongoing trends in 2023 show continued upward momentum in most U.S. markets.

The appreciation rate of a home depends on various factors, with location playing a crucial role. Notably, Florida witnessed a nearly 30% surge in average home values in a single quarter, while North Dakota saw a 10% increase during the same period. Analyzing home value data for 400 metropolitan areas from 1998 to 2022, SmartAsset found that Texas consistently outperformed the country in terms of both home value growth and stability, while Michigan consistently ranked lower.

Despite external factors influencing home values on a national scale, SmartAsset’s analysis sheds light on specific areas where investing in a home may not yield favorable results. For those seeking long-term value appreciation, certain locations are advisable to avoid, considering both historic home value increases and the risk of experiencing a 5% or more price decline within a decade after purchase. The following areas, based on SmartAsset’s rankings, should be approached with caution for potential homebuyers:

1. Flint, Michigan: 45% historic rate of home-loss value
2. Monroe, Michigan: 44%
3. Detroit-Dearborn-Livonia, Michigan: 44%
4. Saginaw, Michigan: 40%
5. East Stroudsburg, Pennsylvania: 45%
6. Rockford, Illinois: 39%
7. Bay City, Michigan: 40%
8. Kokomo, Indiana: 39%
9. Warren-Troy-Farmington Hills, Michigan: 42%
10. Jackson, Michigan: 42%