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Across the country, home prices remain on an uptrend, escalating in 94 percent of major metropolitan regions, according to the latest National Association of REALTORS® quarterly report, based on findings for the fourth quarter of 2019. In the fourth quarter, the existing-home median price was $274,900, a 6.6 percent gain year-over-year.
Buyers continue to lean on low mortgage rates, the report shows. In the final quarter of the year, household incomes rose to $79,740—an increase of roughly $2,650 year-over-year. At the same time, to afford a mortgage, NAR estimates homebuyers needed $48,960, or about $3,940 less, year-over-year, due to lower mortgage payments. In the fourth quarter, the average 30-year fixed mortgage was 3.76 percent.
For first-time homebuyers, affordability also expanded last quarter. To afford a mortgage, the average first-time homebuyer needed $48,288, or approximately $575 less year-over-year, and their average monthly mortgage payment slid to $1,006, assuming a 10 percent down payment.
Still, housing options remain sparse. At the end of the fourth quarter, 1.4 million existing homes were on the market, an 8.5 percent deficit year-over-year, according to the report.
“We saw prices increase during every quarter of 2019 above wage growth,” explains Lawrence Yun, chief economist at NAR. “It is challenging—especially for those potential buyers—where we have a good economy, low interest rates and a soaring stock market, yet are finding very few homes available for sale.”
In the fourth quarter, appreciation climbed considerably in 18 major markets, including:
Meanwhile, the coasts continued their high-price streak, with the costliest homes in:
To afford these areas, a family has to make more than $100,000, assuming 5 percent down on a 30-year fixed mortgage, according to the report.
“Rising home values typically create wealth gains for existing homeowners as shown in NAR’s latest study,” says Yun. “However, areas that are deemed ‘too expensive’ will obviously have trouble attracting residents and companies looking to do business there. We need a good balance that benefits both current and future homeowners, but right now, the balance is still in favor of home sellers.”
For more information, please visit www.nar.realtor.
Suzanne De Vita is RISMedia’s senior online editor. Email her your real estate news ideas at email@example.com.