Home prices rebounded in most markets in the third quarter

Median U.S. home prices moved higher in the third quarter, reversing a trend seen in the first half of the year, but conditions varied widely across markets. According to the National Association of Realtors.

Compared with the third quarter of 2022, single-family home sales were higher in about 82% of the 221 metropolitan areas measured by the trade group.This proportion has increased significantly Compared with 60% in the second quarterTwenty-five markets (11%) experienced third-quarter growth of 10% or more.

The national median rose 2.2% year over year, from $398,100 to $406,900, after falling 2.4% and 0.2% respectively in the previous two quarters.

“After large price changes over the past few years, it is natural for prices to fluctuate briefly,” NAR Chief Economist Lawrence Yun said in a news release. “Some markets that have experienced significant home price increases since 2020 have turned around. for the move lower, causing “this to be temporary relief for potential homebuyers. In addition, some Western markets that experienced price declines in the previous quarter are seeing price increases again. “

But the third-quarter increase likely reflects the housing market’s volatility over the past few years as well as current housing demand, according to CoreLogic. The real estate data provider similarly found house prices rising throughout the summer, but after releasing September’s data, House Price Index chief economist Selma Hepp said the recent upward trend “mainly reflects changes from last year.” Comparison to the lows, when prices began to cool off from double-digit growth in fall 2022.”

NAR’s quarterly report shows median sales prices increased in every geographic region. Home prices rose the most in the Northeast and Midwest, rising 5.3% and 5.2% year-over-year, respectively, to $467,700 and $304,900. Midwestern communities account for 6 of them. The 10 metropolitan areas with the largest price increases were at least 12.6 percent.

In the South, which accounted for the largest share of home sales nationwide, prices rose 1.7% from a year earlier to $369,300. Prices in the West surged during the pandemic but saw the largest pullback in the country earlier this year, recovering 0.6% to a median of $623,100.

But some of the cities with the fastest rising home prices between 2020 and 2022 saw home prices reverse in the third quarter, with Austin, Texas falling 10.3%. Phoenix’s median price dropped 1.5%, while Salt Lake City’s median price dropped 1.5%. , down 1.2%. Two other Texas cities, Dallas and Houston, also fell 1.1%.

Conversely, however, other large cities, especially California, have seen median home prices soar. San Jose’s median rose 9.6% annually in the third quarter, while Anaheim and San Diego were up 8.7%. Median home prices increased 6.6% in Boston and 5.7% in Miami.

San Jose and Anaheim also ranked as the nation’s most expensive housing markets, with median home sales of $1.85 million and $1.31 million, respectively, followed by the San Francisco-Oakland metro area at $1.3 million.

Aspiring buyers may Try to find affordable opportunities According to Yun, there is no relief.

“Congress must consider incentives to increase housing supply and inventory so that more Americans can participate in wealth accumulation. The housing market should not be open only to those who pay cash, nor should it become a playground for the wealthy,” he explain. Adding that the Fed needs to lower interest rates.

first time home buyers The NAR determined that households needed to spend 40.4% of their income on mortgages in the third quarter, up from 38.2% three months ago. The trade group considers any amount above 25% unaffordable.

With a 10% down payment, the monthly amount needed to buy a starter home is $345,900, up 19% from a year ago to $2,149, NAR said.

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