NMN07292019-FirstAmerican.png
Affordability stands as the main obstacle for most homebuyers, with owners staying in their houses longer stymieing inventory expansion, and prices rising faster than wages. However, appreciation is slowing and the market moves closer to equilibrium.

Nationally, "real" house prices fell 3.7% annually and 0.7% month-over-month in May, according to a First American Financial Corp. analysis of home values, factoring in local wages and mortgage rates in large cities.

"The expectation of lower rates comes during the longest economic boom in history and a continued healthy labor market, prompting the question: what do low mortgage rates and a still booming economy mean for housing?

"Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150% greater today than it was in January 2000,” Mark Fleming, chief economist at First American, said in a press release. "While rates are expected to remain low, the fate of the labor market will determine the direction of the other half of the house-buying power equation and, ultimately, affordability."

Providence, R.I., again realized the highest year-over-year real home price growth rate with 2.16%, but the pace significantly slowed from earlier this year when the city's values shot up 17% in January. On the opposite end of the spectrum, San Jose, Calif., saw home prices drop as much as 13.91% from last May.

From Jacksonville, Fla., to Seattle, here's a look at the 12 most favorable housing markets for homebuyer purchasing power.

The data, from the First American Real House Price Index, measures annual home price changes, taking local wages and mortgage rates into account "to better reflect consumers' purchasing power and capture the true cost of housing."

The May 2019 data is ranked by smallest year-over-year changes in RHPI for cities where the current value is less than 100 (an RHPI reading of 100 is equal to housing conditions in January 2000).
12-jacksonville.jpg
/itsallgood - Fotolia

No. 12 Jacksonville, Fla.

Year-over-year RHPI: -3.13%
RHPI: 88.65
Median sale price: $193,463
8-dallas.jpg
Dallas City Skyline at dusk, sunset. Dallas Texas downtown, business center. Commercial zone in big city. Dallas City view from Reunion Tower.
wisanuboonrawd - Fotolia

No. 11 Dallas, Texas

Year-over-year RHPI: -3.27%
RHPI: 95.7
Median sale price: $270,020
NMN101818-washington.jpg
Old Post Office Pavilion
Zack Frank - stock.adobe.com

No. 10 Washington, D.C.

Year-over-year RHPI: -3.36%
RHPI: 85.08
Median sale price: $381,033
NMN020618-nashville.jpg
Downtown Nashville, Tennessee cityscape at night
andreykr - stock.adobe.com

No. 9 Nashville, Tenn.

Year-over-year RHPI: -3.52%
RHPI: 99.8
Median sale price: $252,700
Pittsburgh
Pittsburgh, Pennsylvania.
Rolf Karlsson/karlsson_photo - stock.adobe.com

No. 8 Pittsburgh, Pa.

Year-over-year RHPI: -3.55%
RHPI: 60.12
Median sale price: $143,065
3-chicago.jpg
Trey - Fotolia

No. 7 Chicago, Ill.

Year-over-year RHPI: -4.14%
RHPI: 63.08
Median sale price: $226,345
NMN120617-miami.jpg
Palms and skyline of Miami, Florida, USA
Henryk Sadura/Henryk Sadura - stock.adobe.com

No. 6 Miami, Fla.

Year-over-year RHPI: -4.61%
RHPI: 97.74
Median sale price: $257,272
NMN101818-st-louis-adobe.jpg
St. Louis, Missouri.
SNEHIT - stock.adobe.com

No. 5 St. Louis, Mo.

Year-over-year RHPI: -4.63%
RHPI: 62.59
Median sale price: $163,763
NMN031119-Hartford.jpg

No. 4 Hartford, Conn.

Year-over-year RHPI: -5.53%
RHPI: 73.52
Median sale price: $212,463
NMN041219-san-diego.jpg
San Diego, California, USA downtown city skyline.
SeanPavonePhoto - stock.adobe.com

No. 3 San Diego, Calif.

Year-over-year RHPI: -6.34%
RHPI: 92.81
Median sale price: $562,000
Portland, Ore.
Sunrise over City of Portland Oregon and Mount Hood Covered in Low Fog Banks
David Gn/David Gn - Fotolia

No. 2 Portland, Ore.

Year-over-year RHPI: -7.75%
RHPI: 92.14
Median sale price: $374,250
2-seattle.jpg
Downtown Seattle as seen from the Kerry park in the evening
andreykr - Fotolia

No. 1 Seattle, Wash.

Year-over-year RHPI: -9.39%
RHPI: 86.33
Median sale price: $475,155
MORE FROM NATIONAL MORTGAGE NEWS