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Home Prices Rise in Nearly Every U.S. Metro

DAILY REAL ESTATE NEWS | WEDNESDAY, AUGUST 12, 2015

The nationwide inventory crunch has pushed up home prices year-over-year in 93 percent of the country's 176 major metro areas during the second quarter, according to the National Association of REALTORS®. Nineteen percent of those metros, or 34, saw double-digit increases in the second quarter.

5 Priciest Housing Markets

1. San Jose, Calif.: $980,000 (median single-family price)
2. San Francisco: $841,600
3. Anaheim-Santa Ana, Calif.: $685,700
4. Honolulu: $698,600
5. San Diego: $547,800

5 Most Affordable 

1. Cumberland, Md.: $82,400 (median single-family price)
2. Youngstown-Warren-Boardman, Ohio: $85,000
3. Rockford, Ill.: $94,700
4. Decatur, Ill.: $96,000
5. Elmira, N.Y.: $98,300

Source: National Association of REALTORS®

"Steady rent increases, the slow rise in mortgage rates, and stronger local job markets fueled demand throughout most of the country this spring," says NAR Chief Economist Lawrence Yun. "While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas."

For renters considering home ownership, affordability is becoming a growing problem, Yun says.

"With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering home ownership — especially in higher-priced markets," Yun says.

The national median price for an existing single-family home in the second quarter was $229,400 — an 8.2 percent increase from a year ago.

"The ongoing rise in home values in recent years has greatly benefited home owners by increasing their household wealth," says Yun. "In the meantime, inequality is growing in America because the downward trend in the home ownership rate means these equity gains are going to fewer households."

The median household income in the U.S. rose slightly to $66,637 in the second quarter, but it would still take annual earnings of $49,195 to buy a home at the national median price with a 5 percent down payment; $46,605 for a 10 percent down payment; and $41,427 for a 20 percent down payment, according to NAR.

Regional Snapshot on Home Sales

Here's a look at how home sales fared across the country in the second quarter:

• Northeast: Total existing-home sales rose 10.3 percent and are 8.6 percent ahead of this time last year. Median single-family price: $269,300, up 5.2 percent from a year ago.
• Midwest: Existing-home sales climbed 13.4 percent and are 12.7 percent higher than a year ago. Median single-family price: $182,000, a year-over-year increase of 8.7 percent.
• South: Existing-home sales dropped 1.1 percent but are 6.3 percent above the second quarter of 2014. Median single-family home price: $202,900, up 8.7 percent compared to a year ago.
• West: Existing-home sales climbed 8.1 percent and are 8.1 percent above a year ago. Median single-family home price: $325,200, up 9.6 percent over year-ago levels. 

Source: National Association of REALTORS®