Home Prices Sustained Steady Growth in Most Metro Areas in Q3

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Home Prices Sustained Steady Growth in Most Metro Areas in Q3

Washington, DC, November 13, 2015—The encouraging lift-off in existing-home sales amidst ongoing inventory shortages kept home prices rising in most of the country during the third quarter, but overall price appreciation slowed to a healthier pace, according to the latest quarterly report by the National Association of Realtors.

The median existing single-family home price increased in 87% of measured markets, with 154 out of 178 metropolitan statistical areas (MSAs) showing gains based on closings in the third quarter compared with the third quarter of 2014.

Twenty-four areas (13%) recorded lower median prices from a year earlier.

There were slightly fewer rising markets in the third quarter compared to the second quarter, when price gains were recorded in 93% of metro areas. Twenty-one metro areas in the third quarter (12%) experienced double-digit increases, a decline from the 34 metro areas in the second quarter. Sixteen metro areas (9%) experienced double-digit increases in the third quarter of 2014.

Lawrence Yun, NAR chief economist, says there's no question the housing market had its best quarter in nearly a decade. "The demand for buying picked up speed in many metro areas during the summer as more households entered the market, encouraged by favorable mortgage rates and improving local economies," he said. "While price growth still teetered near or above unhealthy levels in some markets, the good news is that there was some moderation despite the stronger pace of sales."

The national median existing single-family home price in the third quarter was $229,000, up 5.5% from the third quarter of 2014 ($217,100). The median price during the second quarter of this year increased 8.2% from a year earlier.

Total existing-home sales, including single family and condo, increased 3.4% to a seasonally adjusted annual rate of 5.48 million in the third quarter from 5.30 million in the second quarter, and are 8.3% higher than the 5.06 million pace during the third quarter of 2014.