5 Cities Where Homebuyers Are Paying More Despite a Cooling Market
The U.S. housing market is showing signs of a slowdown as sellers pull their homes off the market, buyer demand dwindles and mortgage rates jump to an average of 7.4% according to FreddieMac. But a cooling market doesn’t necessarily mean lower costs.
An August 2026 analysis from Everest Mortgages found that estimated monthly housing payments are still climbing in several major U.S. metros. Here’s a look at the top five cities where people are paying more and why.
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Where Monthly Housing Costs Are Rising Fastest
San Diego, California, is the city that saw the biggest increase, with costs rising 14.88% year over year. Home prices skyrocketed 6.1%, from $895,000 in 2025 to $950,000 in 2026, while the mortgage rate hit 7.25%.
Property taxes alone don’t explain the difference, said Mike Plactere, certified public accountant (CPA), real estate agent and owner of We Buy Long Island Homes Fast.
In San Diego, property taxes account for about 8% of the monthly payment, compared with roughly 18% in Cleveland and Chicago.
“The payment went up 14.9%. The rest of that is the mortgage rate, and San Diego has the highest one on the list,” Plactere said.
These other 4 cities also saw rising costs:
Detroit: Monthly payments rose 6.2%, matching home-price growth. The average home price was $210,000, with a property tax rate of 1.52%.
Buffalo, New York: Home prices increased to 7%, the largest increase among the five cities, while monthly payments climbed 6.2%. Its property tax rate was 1.76%.
Milwaukee: Monthly payments increased 5.5%, matching home-price growth. The average home price was $295,000, with a 6.63% mortgage rate and a 1.68% property tax rate.
Cleveland: Monthly payments rose 5.5%, while average home prices increased from $194,000 to $205,000. Its 1.80% property tax rate was the highest among the five cities.
Why Payments Can Outpace Prices
The price of a home typically grabs all of the attention, but Yawar Charlie, director of estates at Christie’s International Real Estate Southern California, said buyers also need to consider other expenses. Things like the interest rate, a smaller down payment, property taxes, insurance and, in some cases, HOA dues and mortgage insurance can all drive up the monthly payment.
“If several of those costs move in the wrong direction at once, the monthly payment can rise much faster than the price of the home,” Charlie explained. “That’s why I tell buyers not to shop by price alone, so before you make an offer, ask your lender to run the full monthly cost for that specific property.”
Even a seemingly small rate change can make a substantial difference. On an $800,000, 30-year fixed-rate mortgage, an increase from 6.5% to 7.5% adds roughly $540 a month in principal and interest alone.
“Suddenly, one percentage point doesn’t feel so small,” said Charlie.
What Buyers Can Do
Buyers facing higher costs could look for a lower purchase price, a bigger down payment or a property with lower taxes and fees. Refinancing could become an option if rates fall, but Charlie cautions against counting on that to make a purchase work.
“A preapproval tells you what you may qualify for; it doesn’t mean you should spend every dollar of it,” Charlie said.
Property taxes can also affect buyers differently depending on their tax situations. As Plactere explained, homeowners who itemize deductions may be able to deduct eligible property taxes, subject to federal limits, while those who take the standard deduction generally cannot claim a separate deduction for them.
“Two buyers with the same tax bill can end up with very different real costs,” Plactere said.
The Bottom Line
A lower listing price is nice. A lower monthly bill is what actually matters, and in these five cities, that number keeps creeping up. Before you fall for a discounted listing, get the full monthly payment quoted, check the property tax bill and run the numbers under a few rate scenarios. The sticker price tells you what the house costs. The monthly payment tells you whether you can live with it.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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