Across the largest markets, home prices are rising, but at a healthier rate than in recent years, according to new research.
From the fourth quarter of 2017 to the fourth quarter of 2018, home prices rose 4 percent, according to a National Association of REALTORS® (NAR) report. On an annual basis, there were higher home prices in 92 percent, or 163, of the 178 metropolitan areas in the report. Comparing the largest markets, the median price was $257,600. Among condos/co-ops, the median price was $237,900.
Despite the easing gains in home prices, affordability is still tight, the report shows. To buy at the median price, and assuming a 5 percent down payment, a homebuyer would have to have an income of $62,954; assuming 10 percent, a buyer would have to have $59,640; and assuming 20 percent, $53,013. Although average earnings have increased nationally to $77,392, high home prices, and now, higher mortgage rates, are contributing to the cost crunch.
According to the report, with affordability diminished, existing-home sales slid, down 1.8 percent from the last quarter and 7.4 percent from the prior year. At the close of the fourth quarter of 2018, existing for-sale inventory totaled 1.55 million—6.2 percent higher than the prior year. During the fourth quarter, the average supply was 4.0 months.
By region:
Midwest
Q4 Existing-Home Sales: -5.9% YoY
Q4 Median Price: $196,900 (+1.6% YoY)
Northeast
Q4 Existing-Home Sales: -5.4% YoY
Q4 Median Price: $286,000 (+6.5% YoY)
South
Q4 Existing-Home Sales: -5.4% YoY
Q4 Median Price: $228,200 (+3.3% YoY)
West
Q4 Existing-Home Sales: -6.5% YoY
Q4 Median Price: $383,100 (+1.8% YoY)
According to the report, the most expensive markets were:
- San Jose-Sunnyvale-Santa Clara, Calif. – $1.25 million
- San Francisco-Oakland-Hayward, Calif. – $952,400
- Urban Honolulu, Hawaii – $812,900
- Anaheim-Santa Ana-Irvine, Calif. – $799,000
- San Diego-Carlsbad, Calif. – $626,000
The least expensive were:
- Decatur, Ill. – $89,300
- Youngstown-Warren-Boardman, Ohio – $97,200
- Cumberland, Md. – $109,100
- Elmira, N.Y. – $111,400
- Erie, Pa. – $113,300
“Home prices continued to rise in the vast majority of markets but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace,” says Lawrence Yun, chief economist at NAR. “Housing affordability will be the key to sustained healthy growth in the housing market in the upcoming years. That requires more home-building of moderately-priced homes. Local zoning law changes, expanding construction worker training programs at trade schools and promoting the use of tax breaks for developers in the designated Opportunity Zones will all play an important role in assuring an adequate future supply of housing.”
For more information, please visit www.nar.realtor.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.
