NAR chief economist Lawrence Yun commented on the implications of these record prices: “It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago.”
Price appreciation in cities
In the second quarter, 29 metro areas, or 13%, saw double-digit annual price appreciation, down from 30% in the prior quarter. The South led the nation with the largest share of single-family home sales at 45.5%, experiencing a 2.3% increase in year-over-year prices. Meanwhile, the Northeast saw a substantial 9.8% price jump, followed by the Midwest at 5.5% and the West at 5.4%.
The report identified the top 10 metro areas with the highest median price increases, all of which posted gains of at least 14.1%. Leading these were Racine, WI, and Glens Falls, NY, both at 19.8%. Notably, seven of the top 10 most expensive markets were in California, including San Jose-Sunnyvale-Santa Clara, with a staggering median price of $2,008,000.
The report also highlighted a trend of declining prices in nearly 10% of markets, up from 7% in the previous quarter. Markets such as Nashville, Durham, and Austin have seen slowdowns, while areas like San Francisco and New York have shown robust recovery.
Affordability remains a major concern, with the typical monthly mortgage payment on an existing single-family home reaching $2,262. This marks a 10.3% increase from a year ago. First-time buyers have been particularly affected, with the cost of a starter home surging and requiring a typical family to allocate 40% of their income towards mortgage payments.
Source: mpamag.com