Washington, DC, Feb. 12, 2013 -- A growing number of metropolitan areas had higher median home prices in the fourth quarter, with the national price showing the strongest year-over-year increase in seven years, according to the latest quarterly report by the National Association of Realtors.
The median existing single-family home price rose in 133 out of 152 metropolitan statistical areas based on closings in the fourth quarter compared with same quarter in 2011, while 19 areas had price declines, NAR said.
In the third quarter 120 areas showed increases from a year earlier, while in the fourth quarter of 2011 only 29 metros were up.
Lawrence Yun, NAR chief economist, said all the conditions for strong price growth are at play.
"Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years," he said.
Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play."
Yun added that more housing construction is needed to relieve some of the pressure in the market and keep home prices from overheating.
The national median existing single-family home price was $178,900 in the fourth quarter, up 10.0 percent from $162,600 in the fourth quarter of 2011, which is the strongest year-over-year price increase since the fourth quarter of 2005 when the median price jumped 13.6 percent. In the third quarter the price rose 8.8 percent from a year earlier.