Washington, DC, Aug. 12, 2014 -- Home-price growth continued to moderate in many metropolitan areas in the second quarter and national year-over-year price appreciation is now at its slowest pace since 2012, according to the latest quarterly report by the National Association of Realtors.
The median existing single-family home price increased in 71% of measured markets, with 122 out of 173 metropolitan statistical areas (MSAs) showing gains based on closings in the second quarter compared with the second quarter of 2013. Forty-seven areas (27%) recorded lower median prices from a year earlier.
There were fewer rising markets in the second quarter compared to the first quarter, when price increases were recorded in 74% of metro areas. Furthermore, 19 areas in the second quarter (11%) had double-digit increases, a sharp decrease from the 37 areas last quarter and the overall average of 43 areas since the second quarter of 2013.
Lawrence Yun, NAR chief economist, says price increases are balancing out to the benefit for both buyers and sellers.
“National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth,” he said.
“At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose.”
The national median existing single-family home price in the second quarter was $212,400, up 4.4% from the second quarter of 2013 ($203,400). The median price during the first quarter of 2014 rose 8.3% from a year earlier.
Yun adds that despite the stabilization in price growth, sharp increases still exist in some markets and are impacting sales, notably on the West Coast where inventory shortages are more prevalent. “New construction for ownership housing and rentals is needed to alleviate price and rent pressures and accommodate their growing populations,” he said.