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Home Prices Moving Ever Higher09-14-16 | News

Home Prices Moving Ever Higher
Gains in 83 Percent of Metro Areas

Despite very low mortgage rates, home prices shot higher in the second quarter, compared to the same time frame in 2015, in 83 percent of the 178 metro areas tracked by the National Association of Realtors.

Home prices continued to climb higher in most metro regions of the country during the second quarter of 2016, compared to the same quarter of 2015, the National Association of Realtors reports.

As a result, housing affordability has slipped a bit, even though mortgage rates are the lowest they have been in more than three years.

Median existing single-family home prices increased in 83 percent of markets the NAR monitors, with 148 out of 178 statistical regions showing gains. Median prices declined in only 29 areas, or 16 percent, of the metro areas the NAR covers.

The NAR's second-quarter report also shows that, for the first time ever, the median price in one market "?u San Jose, Calif. "?u jumped above $1 million.

"Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities," said Lawrence Yun, chief economist for the NAR. "However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent "?u and in many markets at a rate well above income growth."

The national median price for an existing single-family home was $240,700, an increase of 4.9 percent from the second quarter of 2015.

Total existing home sales, including single-family homes and condos, were 3.8 percent higher in the second quarter, versus the first quarter. Sales are also up 4.2 percent, compared to the same three-month time frame in 2015.

"Primarily from repeat buyers moving up or trading down, existing sales increased each month last quarter and could've been even higher if not for a few speed bumps," explained Yun. "Closings were slowed a bit by meager supply levels and home prices in many areas that are still rising too fast."

Regional Breakdown
Northeast: Existing home sales climbed 7.6 percent in the second quarter, compared to the first quarter, and jumped 11.3 percent versus the second quarter of 2015. The median price for an existing home went up 1.6 percent from a year earlier.

Midwest: Sales jumped 10.4 percent in the second quarter, and 6.6 percent compared to the same time frame of 2015. The median home price increased 1.5 percent from a year ago.

South: Existing home sales barely moved, edging upward by 0.3 percent in the second quarter, and increased 4.2 percent versus the second quarter of last year. The median price went up 5.9 percent from the same time frame in 2015.

West: Sales moved upward 1.4 percent in the quarter, but decreased 2.2 percent versus the second quarter of 2015. The median price of existing homes increased 6.5 percent, compared to the second quarter of last year.