Zillow recently made a big change to its home price forecast. Now it’s predicting that U.S. home prices will rise this year, with an increase of 3.5% between December 2023 and December 2024. If that prediction comes to fruition, it would mean that national home prices in 2024 would see almost identical home price growth as 2023, which was 3.2%.
With the exception of San Francisco and several housing markets in Louisiana, Zillow expects prices to rise across the board this year. This is a pretty big forecast revision. Back in November 2023, Zillow shifted its forecast downward, publishing a 12-month forecast predicting that U.S. home prices would fall -0.1% between October 2023 and October 2024.
Just as Zillow’s forecast model became more bearish in the fall when the average 30-year fixed mortgage soared over 7.5%, it has now reversed and become a bit more bullish as the average 30-year fixed-rate mortgage has fallen back under 7%. That shift in financial markets/mortgage rates may have influenced the model.
Mortgage Rates Rise to Highest Level In 2024
Mortgage rates are inching up after reports of hotter-than-expected inflation data showed continued strength in the U.S. economy. With inflation still over its 2% target (alongside a robust job market), the market is anxious about when the Fed will start cutting its benchmark interest rate, which is currently keeping mortgage rates elevated. The 30-year fixed-rate mortgage averaged 6.77% as of February 15th, according to data released by Freddie Mac. That’s up 13 basis points from the previous week. One basis point is equal to one hundredth of a percentage point.
Mortgage rates were last at this level in mid-December, when rates fell below 7% for the first time since August. A year ago, the 30-year mortgage rate was averaging 6.32%. As of February 15th, the average rate on the 15-year mortgage was 6.12%, up from 5.9% last week. The 15-year rate was at 5.51% a year ago. Freddie Mac’s weekly report on mortgage rates is based on thousands of applications received from lenders across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. Separate data from Mortgage News Daily showed the 30-year fixed-rate mortgage averaging 7.03% in February. What Freddie Mac says: “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season,” Sam Khater, chief economist at Freddie Mac, said in a statement. “According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier,” he added. “Mortgage rates have been volatile due to strong employment data, rising last week and leading to a 2% drop in applications,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, said in a statement.
Ten Most Expensive Zip Codes in the United States
Depending on who you are, living in one of the most expensive zip codes in the United States is either wholly aspirational or a something you’d like to avoid at all costs. No matter which camp you fall into, you still must know which locales top the list. To that end, Zillow uncovered the priciest real estate markets across the country. The results are based on data from December 2023 analyzed with the Zillow Home Value Index, which the company uses to determine the typical home value in a given geography, now and over time. Curious which cities found their ways onto the list? Below, dive into the most expensive zip codes in the United States in reverse order:
- Zip Code: 81656 (Woody Creek, Colorado). The typical home value in Woody Creak, Colorado, is $4,336,373, making it the 10th most expensive zip code in the country. In the 2020 census, the population of the costly enclave near Aspen was just 290. The area is a favorite for celebrities and has reportedly been home for people such as Don Henley of the Eagles, John Oates, and Don Johnson.
- Zip Code: 31561 (Brunswick, Georgia). Homes along in the Atlantic Coast in the Golden Isles of Georgia don’t come cheap: The typical home value in the area is $4,365,388 according to Zillow data. The pricey area code encompasses properties on Little St. Simons Island, Sea Island, and St. Simons Island.
- Zip Code: 11976 (Water Mill, New York). One might guess that New York City would top the list of most expensive zip codes in the country, but only two cities in the Empire State broke the top ten, the first of which is located out east in Water Mill, New York. Part of the town of South Hampton, the standard home value is $4,372,420. The community dates back to the 1640s and is now known for its beaches, farms, and mansions. Many celebrities have lived in the town including Jennifer Lopez and Richard Gere.
- Zip Code: 92657 (Newport Beach, California). Fans of TheO.C. may find it unsurprising that Newport Beach, the home of the fictional well-off Cohen family, is among the priciest places to live in the United States. The coastal city, where the typical home value is $4,378,430, is known for its beaches, surf culture, and upscale shopping areas.
- Zip Code: 94022 (Los Altos, California). With a typical home value of $4,495,775, Los Altos is the sixth most expensive zip code in the United States. Located in Santa Clara County within the San Francisco Bay Area, it’s a primarily residential community, where seven small retail districts serve the town.
- Zip Code: 93108 (Montecito, California). Montecito is known as a celebrity enclave, so it’s not all too surprising that the town would be among the priciest places to live. Home to stars like Gwenyth Paltrow, Meghan Merkle and Price Harry, the area is defined by Spanish style architecture—homes with terra-cotta clay tile roofs and soft arches cut out of white stucco walls. Here, the typical home value is $4,503,435.
- Zip Code: 11962 (Sagaponack, New York). Like Water Mill, Sagaponack is also within the town of Southhampton. Though they’re just a few miles apart, the latter is quite a bit more expensive. Encompassing just 4.56 square miles, homes here are typically valued around $5,168,916. According to The Wall Street Journal, there are about 350 full-time residents in the community and more than 1,000 part-timers.
- Zip Code: 90210 (Beverly Hills, California). Though 90210 is perhaps the most recognizable zip code in the country, it is only the third most expensive. The typical home value in Beverly Hills is $5,243,140, according to Zillow data. Rodeo Drive, Beverly Garden Park, and the Beverly Hills Hotel are among its most notable attractions, while iconic architecture, like the Sheats-Goldstein Residence is there too.
- Zip Code: 33109 (Miami Beach, Florida). The second priciest real estate market is located at the southeastern tip of the country in Miami Beach, Florida. The zip code largely encompasses Fisher Island, a private enclave only accessible by ferry. Celebrities like Oprah, Mel Brooks and Boris Becker have reportedly owned homes here, where the typical home value is $5,675,294.
- Zip Code: 94027 (Atherton, California). Located within San Mateo County in the Bay Area, Atherton is currently the most expensive zip code in the country, but the area is controversial. The town’s zoning laws allow only one single-family home per acre and no sidewalks, which many housing advocates say the locale uses to exclude and metaphorically gate the community.
After practicing law for 35 years (specializing in real estate litigation), Lloyd Segal was
elected President of the Los Angeles County Real Estate Investors Association (“LAC-
REIA”) in 2017. LAC-REIA is the oldest (1996) and largest investor group in California.
Lloyd is an author, investor, mentor, public speaker, and LANDLORD. As president,
Lloyd conducts Basic Training Real Estate Boot Camps (8-hour intensive). “Everything
you ever wanted to know about real estate investing, but were afraid to ask.” To
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