Home prices are up in 89% of the country during the second quarter
Existing-home sales prices climbed in 199 out of 223 metro areas, nearly 90% of the country. While this seems like a staggering number, it’s actually slightly down from the first quarter, which saw home price gains in 93% of the country. The number of metro areas that saw double digit growth was 13%, which was actually down from 30% in the last quarter. Overall, the national median single-family existing-home price grew 4.9% from one year ago to $422,100, according to a report from the National Association of Realtors® (NAR).
This quarter, for the first time in history, a metro area’s median home price was greater than $2 million - in San Jose, California. While this may seem like daunting news, particularly for first-time homebuyers, there fortunately are many ways to make homeownership more affordable.
"The record-high home prices in most metro markets bring good and bad news," said NAR Chief Economist Lawrence Yun. "It's terrific news for homeowners who are moving ahead in wealth gains. However, it's difficult for those wanting to buy a home, as the required income to qualify has roughly doubled from just a few years ago."
Prices up nationwide
Prices were up in each region of the country, showing that this trend isn’t just driven by geography.
- Northeast: up 9.8%
- Midwest: up 5.4%
- South up 2.3%
- West: up 5.4%
The markets with largest year-over-year increases were mainly in the Northeast. These regional variations show how important it is for buyers to work with local experts:
- Racine, Wis. (19.8%)
- Glens Falls, N.Y. (19.8%)
- El Paso, Texas (19.2%)
- Morristown, Tenn. (16.7%)
- Manchester-Nashua, N.H. (16.2%)
- Anaheim-Santa Ana-Irvine, Calif. (15.0%)
- New York-Jersey City-White Plains, N.Y.-N.J. (14.8%)
- Springfield, Ill. (14.8%)
- Dutchess County-Putnam County, N.Y. (14.2%)
- Trenton, N.J. (14.1%)
The most expensive markets in the U.S. remain very similar from the past few quarters and almost exclusively out West, continuing a long-standing trend:
- San Jose-Sunnyvale-Santa Clara, Calif. ($2,008,000; 11.6%)
- San Francisco-Oakland-Hayward, Calif. ($1,449,000; 8.5%)
- Anaheim-Santa Ana-Irvine, Calif. ($1,437,500; 15%)
- Urban Honolulu, Hawaii ($1,101,500; 3.8%)
- San Diego-Carlsbad, Calif. ($1,050,000; 11.4%)
- Salinas, Calif. ($1,035,700; 13.1%)
- Oxnard-Thousand Oaks-Ventura, Calif. ($927,900; 2.5%)
- San Luis Obispo-Paso Robles, Calif. ($895,300; 0.5%)
- Boulder, Colo. ($888,300; 2%)
- Naples-Immokalee-Marco Island, Fla. ($867,000; 2%)
"Previously fast-gaining markets took a breather in the past quarter, including Nashville, Durham, Austin and several Florida metro areas," Yun said. "Conversely, some markets that experienced declines last year have roared back, such as San Francisco, Anaheim and New York."
Affordability suffers with higher mortgage rates
Housing affordability worsened as mortgage rates increased over the past three months. The monthly mortgage payment for a typical existing single-family home with a 20% down payment rose to $2,262, an 11.1% increase from the previous quarter and 10.3% higher than a year ago.
Families spent 26.5% of their income on mortgage payments, up from 24.2% in Q1. First-time buyers faced significant challenges, with the monthly payment for a starter home rising to $2,218, consuming 40% of their income. A family needed a $100,000 income to afford a 10% down payment mortgage in nearly half of the markets, a significant increase from last quarter.
Yun did note that recent trends in mortgage rates offer homebuyers reason to be optimistic. "Housing affordability will improve in upcoming months," Yun said. "Mortgage rates have fallen measurably and more supply is reaching the market. Therefore, the income required to buy a home will decrease."
Source: https://www.nar.realtor/newsroom/nearly-90-percent-of-metro-areas-saw-home-price-gains-in-Q2-2024
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