Persistent supply shortages throughout the country led to slightly faster home price appreciation during the third quarter, according to the latest quarterly report by the National Association of REALTORS®. The report also revealed that seven of the 10 most expensive housing markets in the U.S. are in the West, including San Jose, Calif., which had a median single-family home price of $1 million for the second straight quarter.
The median existing single-family home price increased in 87 percent of measured markets, with 155 out of 178 metropolitan statistical areas (MSAs) showing gains based on closed sales in the third quarter compared with the third quarter of 2015. Twenty-two areas (12 percent) recorded lower median prices from a year earlier.
There were a growing number of rising markets in the third quarter compared to the second quarter of this year, when price gains were recorded in 83 percent of metro areas. Twenty-five metro areas in the third quarter (14 percent) experienced double-digit increases—unchanged from the second quarter of this year. A year ago, 21 metro areas (12 percent) saw double-digit price appreciation.
Lawrence Yun, NAR chief economist, says prospective buyers faced a very challenging market during the third quarter. “Mortgage rates around historical lows and solid local job creation created a winning formula for sustained home-buying demand all summer long,” he says. “Unfortunately, for house hunters in several of the top job producing metro areas around the country, deficient supply levels limited their options and drove prices higher—especially in markets in the West and South.”
The national median existing single-family home price in the third quarter was $240,900, which is up 5.2 percent from the third quarter of 2015 ($228,900), surpassing this year’s second quarter ($240,700) as the current peak quarterly median sales price. The median price during the second quarter increased 4.9 percent from the second quarter of 2015.
Total existing-home sales, including single-family and condos, slid 2.2 percent to a seasonally adjusted annual rate of 5.38 million in the third quarter from 5.50 million in the second quarter of 2016, and are 0.4 percent lower than the 5.40 million pace during the third quarter of 2015.
“After climbing to their highest annual pace in over nine years in June, sales sputtered in the third quarter because inventory could not catch up with what was being quickly sold,” says Yun. “Only a decent rebound in September kept the monthly and annual sales declines from being even larger.”
At the end of the third quarter, there were 2.04 million existing homes available for sale, which was 6.8 percent below the 2.19 million homes for sale at the end of the third quarter in 2015. The average supply during the third quarter was 4.6 months, down from 4.9 months a year ago.
Despite faster price growth last quarter, the decline in mortgage rates and an uptick in the national family median income ($70,306) slightly improved affordability compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down …read more
From:: Finance and Economy