Report shows unwavering price gains in an overwhelming majority of metro areas during the first quarter of the year
By Jeff Sorg, OnlineEd Blog
(May 10, 2016) – The median existing single-family home price increased in 87 percent of measured markets, with 154 out of 178 metropolitan statistical areas showing gains based on closed sales in the first quarter compared with the first quarter of 2015, according to the latest quarterly report by the National Association of Realtors®. Twenty-four areas (13 percent) recorded lower median prices from a year earlier.
There were more rising markets in the first quarter compared to the fourth quarter of 2015, when price gains were recorded in 81 percent of metro areas. Twenty-eight metro areas in the first quarter (16 percent) experienced double-digit increases – a slight decrease from the 30 metro areas in the fourth quarter of 2015; fifty-one metro areas (28 percent) experienced double-digit increases in the first quarter of last year.
“The solid run of sustained job creation and attractive mortgage rates below 4 percent spurred steady demand for home purchases in many local markets,” said Lawrence Yun, NAR Chief Economist. “Unfortunately, sales were somewhat subdued by supply and demand imbalances and broadly rising prices above wage growth. As a result, the path to homeownership so far this year remains strenuous for a segment of prospective buyers in the most competitive areas.”
- The national median existing single-family home price in the first quarter was $217,600, up 6.3 percent from the first quarter of 2015 ($204,700). The median price during the fourth quarter of 2015 increased 6.7 percent from the fourth quarter of 2014.
- Total existing-home sales, including single family and condo, rose 1.7 percent to a seasonally adjusted annual rate of 5.29 million in the first quarter from 5.20 million in the fourth quarter of 2015, and are 4.8 percent higher than the 5.05 million pace during the first quarter of 2015.
“The demand for buying is there, but unless the stock of new and existing homes for sale increases significantly – especially in several markets in the West – the housing market will struggle to reach its full potential,” added Yun.
- At the end of the first quarter, there were 1.98 million existing homes available for sale, which was below the 2.01 million homes for sale at the end of the first quarter in 2015. The average supply during the first quarter was 4.3 months – down from 4.6 months a year ago.
- Despite an increase in the national family median income ($68,431), climbing home prices and higher mortgage rates caused affordability to decline in the first quarter compared to the first quarter of last year.
“Current homeowners in many metro areas – especially those who purchased a home immediately after the downturn – have enjoyed a sizeable boost in housing equity and household wealth in recent years,” adds Yun. “At a time of stagnant wage growth and mounting rent increases, the same cannot be said for renters. Their inability to reach the market because of affordability and supply restrictions is contributing to rising wealth inequality in the U.S.”
- The five most expensive housing markets in the first quarter were the San Jose, Calif., metro area, where the median existing single-family price was $970,000; San Francisco, $770,300; Honolulu, $721,400; Anaheim-Santa Ana, Calif., $713,700; and San Diego, $554,300.
- The five lowest-cost metro areas in the first quarter were Cumberland, Md., $67,400; Youngstown-Warren-Boardman, Ohio, $77,500; Decatur, Ill., $83,300; Wichita Falls, Texas, $95,200, and Rockford, Ill., $95,800.
[Article Source: NAR news release]
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