Driven by gains in the Northeast and Midwest, 80% of U.S. metros saw annual home price increases this spring, marking a meaningful acceleration from the start of the year.
Median sales prices for existing single-family homes rose year-over-year in 188 out of the 235 markets tracked by the National Association of Realtors®, which released its latest quarterly report on Tuesday.
That’s a gain from the 71% share that saw annual price increases in the first quarter, potentially signaling renewed momentum in the housing market even in the face of elevated mortgage rates.
“Home sales increased despite mortgage rates rising. This testifies to the potential housing demand building up from steady job and income gains,” says NAR Chief Economist Lawrence Yun.
The national median single-family existing-home price rose 1.5% year-over-year to $434,900, up from 0.5% annual growth in the first quarter.
Five percent of metros recorded double-digit price gains, unchanged from last quarter.
At the regional level, the inventory-constrained Northeast experienced the most meaningful annual price increase of 3.8% to $547,200, followed closely by the Midwest, where the median price rose 3.6% to $340,800.
The South continued lagging behind with a gain of just 1% year over year to $380,000.
Meanwhile, the West was once again the only region to experience a pullback in existing home prices, which retreated 0.8% from a year ago to $637,900.
“Sales rose in three of the four major regions, with the South leading the way due to faster job growth. The Northeast was the exception, held back partly by slower job growth and faster-appreciating home prices, which hurt affordability,” notes Yun.
Among the markets tracked by NAR, Beaumont, TX, saw the biggest jump in median home prices, at 11%, followed by Naples, FL (10.5%), Gulfport, MS (10.3%), Syracuse, NY (9.6%), and Hartford, CT (8%).
Typical monthly payments for homeowners
On the affordability front, 20% of metro markets experienced declining median home prices, down from 27% in Q1 and down from 24% a year ago.
The median monthly mortgage payment on a typical existing single-family home with a 20% down payment settled at $2,199, down $219 from the previous quarter, and down $52 from a year ago.
“It is welcoming to see incomes rising faster than home prices, which has helped boost affordability—but the big short-term challenge to affordability is coming from rising mortgage rates,” says Yun.
The typical family that purchased a home last quarter was spending 23.8% of their income on mortgage payments, up from 21.8% last quarter but down from 25.5% year over year.
For first-time buyers, the typical mortgage payment on a starter home was $2,158, taking NAR’s assumption of a home valued at $369,700 with a 10% down payment. That’s up $214 from Q1 but down $49 compared to a year ago.
This spring, first-time buyers were spending 35.9% of their income on a monthly mortgage payment, up from 32.9% last quarter and down from 38.4% last year.
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