Median Home Price Increase Best Since 2005
Washington, DC, Aug. 9, 2013 -- Median home prices continued to rise in the majority of metropolitan areas in the second quarter, with the national year-over-year price showing the strongest gain in seven-and-a-half years, according to the latest quarterly report by the National Association of Realtors.
Despite rising prices and higher mortgage interest rates, a companion breakout of income requirements to buy a median-priced home on a metro area basis shows most buyers remain well positioned to afford a home in their area, NAR said.
The median existing single-family home price increased in 87% of measured markets, with 142 out of 163 metropolitan statistical areas showing gains based on closings in the second quarter compared with the second quarter of 2012. Fifty areas, 31%, had double-digit gains; one was unchanged and 20 had price declines.
Lawrence Yun, NAR chief economist, said tight inventory is continuing to drive home prices.
“There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country,” he said.
“Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year in most of the country. Areas with tighter supplies generally are seeing the strongest price growth, including markets such as Sacramento, Atlanta, Las Vegas, Naples, San Francisco and Los Angeles.”
The national median existing single-family home price was $203,500 in the second quarter, up 12.2% from $181,300 in the second quarter of 2012, which is the strongest year-over-year increase since the fourth quarter of 2005 when it surged 13.6%. In the first quarter the median price rose 11.3% from a year earlier.
At the end of the second quarter there were 2.19 million existing homes available for sale, which is 7.6% below the close of the second quarter of 2012, when 2.37 million homes were on the market. The average supply during the quarter was 5.1 months, compared with 6.4 months in the second quarter of 2012.