Despite a slowdown in home sales, home prices continue to soar. Eighty percent of 185 major metro markets across the country posted double-digit annual price appreciation in median single-family existing-home sales prices, the National Association of REALTORS(R)’ latest quarterly report shows. Nationwide, the median single-family existing-home price climbed 14.2% annually, reaching $413,500 in the second quarter. That marks the first time that the median home price has surpassed $400,000, NAR reports.
Higher home prices and higher mortgage rates chipped away at housing affordability in the second quarter. Housing affordability declined as monthly mortgage payments on a typical single-family home (with a 20% down payment) surged by nearly a third quarter over quarter to $1,841. That’s an increase of $444 compared to the first quarter and is up by $612–or 50%–compared to one year ago, according to NAR’s report. “Home prices have increased at a pace that far exceeds wage gains, especially for low- and middle-income workers,” says NAR Chief Economist Lawrence Yun.
Still, some hope may be ahead for home buyers: A less competitive housing market may be a “welcome relief” to buyers who had been priced out from the competition, Yun says. “The recent dips in mortgage rates will bring additional buyers to the market, especially in those places where home prices are still relatively affordable and where jobs are being added,” Yun says.
10 Markets With Largest Price Gains
Seven markets with the highest price gains year over year were in Florida. NAR reports that the top 10 metro areas with the largest gains saw price increases greater than 25% annually. “The local job market performance and supply availability are the clear distinguishing factors driving local home price growth,” Yun says. “Job growth is positive and should be applauded, but supply restraints are creating unnecessary barriers to ownership opportunities.”
The top 10 markets with the highest price gains, according to NAR’s quarterly report, are:
Fayetteville-Springdale-Rogers, Ark.-Mo.: 31.9% year-over-year price increase
Lakeland-Winter Haven, Fla.: 31.4%
Naples-Immokalee-Marco Island, Fla.: 28.9%
North Port-Sarasota-Bradenton, Fla.: 28.8%
Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.: 28.5%
Tampa-St. Petersburg-Clearwater, Fla.: 28%
Cape Coral-Fort Myers, Fla.: 27.8%
Punta Gorda, Fla.: 27.4%
Ocala, Fla.: 26.7%
Ogden-Clearfield, Utah: 25.5%
Overall, California continues to have the most expensive housing markets in the country. The top priciest housing markets in the second quarter were:
San Jose-Sunnyvale-Santa Clara, Calif.: $1.9 million median home price, up 11.8%
San Francisco-Oakland-Hayward, Calif.: $1.55 million, up 11.9%
Anaheim-Santa Ana-Irvine, Calif.: $1.3 million, up 17.2%
Honolulu: $1.145 million, up 17.3%
San Diego-Carlsbad, Calif.: $965,900, up 13.6%
Boulder, Colo.: $933,400, up 11.8%
Naples-Immokalee-Marco Island, Fla.: $850,000, up 28.9%
Los Angeles-Long Beach-Glendale, Calif.: $825,700, up 9.2%
Seattle-Tacoma-Bellevue, Wash.: $818,900, up 14.4%
Boston-Cambridge-Newton, Mass.-N.H.: $722,200, up 8.9%
