The Ship is Turning: New Orleans Housing Market Appears to be Turning Around

Summary of Findings

• Home prices are rising in New Orleans.
• Indicators beyond price increases point to a market recovery.

Research conducted by Dr. Ken Johnson, the Christie Kirkland Walker Chair of Real Estate with the University of Mississippi, and his colleague Dr. Eli Beracha with Florida International University suggests the local market may have officially reached its pricing floor in mid-2025.

The analysis is drawn from the Beracha and Johnson Housing Ranking Index, which compares actual home prices against a statistically estimated long-term pricing trend. The raw data for this index comes from the widely utilized Zillow Home Value Index (ZHVI). Johnson and Beracha’s methodology models a metro area's average home prices from January 2000 to the present and calculates the ongoing percentage difference (either a premium or a discount) relative to that historical trend line.

Market Dynamics and Key Findings

The New Orleans market hit its recent peak in July 2022, with an average home price of $292,500. At that point, typical homes in New Orleans were selling at a significant premium, 12.9% above the metro's long-term pricing trend.

The market subsequently entered a contraction phase, with prices falling consistently until June 2025, when they bottomed out at an average of $251,800. Since that low point, the average home price has begun a modest recovery, rising to the end of October price of $253,700.

Crucially, the market's discount relative to its historical trend is beginning to narrow. The current discount is 8.5%, an improvement over previous months:

• July 2025 Discount: 8.7%
• August 2025 Discount: 8.6%
• September 2025 Discount: 8.6%

Expert Interpretation

Two factors -- the shift in the direction of average home prices and the steady shrinkage of the discount -- as strong evidence that the New Orleans market has found its bottom.

Housing prices are mean reverting around our long-term pricing trend and prices naturally cycle above and below this trend line. Prices have been falling for quite a while in New Orleans, but signs now point to a turnaround.

The current trend suggests a shift in buyer behavior. One way to look at these results is that prices have just become too much of a deal for families in New Orleans to turn down, implying that the attractiveness of discounted homeownership is beginning to outweigh external factors like high mortgage rates.

For a deeper dive into the data and methodology, the Beracha and Johnson Housing Ranking Index is available through the American Real Estate Society (ARES) website.

Ken Johnson, Ph.D.
Christie Kirkland Walker Chair of Real Estate
University of Mississippi