in more than half of major metropolitan markets with available data are now at
or above their previous price peaks after what the National Association of
Realtors® (NAR) calls the best quarterly sales pace of the year. Existing home sales in the fourth quarter of
2016 brought housing inventories to record lows and helped to push single
family prices higher. NAR reports that
the median price of a single family home increased year-over-year in 89 percent
of the 178 metropolitan markets it tracks. Only 20 metro areas, 11 percent, had
median prices below those of a year earlier.
number of rising markets exceeded those in the third quarter by 2 percentage
points and the number of metro areas with double-digit price gains increased
from 31 or 14 percent to 17 percent. Of
the 150 markets which NAR has tracked since before the housing crisis, 78 (or 52
percent) now have a median sales price at or above their previous all-time
Yun, NAR chief economist, says home-price gains didn't let up throughout 2016. "Buyer interest stayed elevated in most areas
thanks to mortgage rates under 4 percent for most of the year and the creation
of 1.7 million new jobs edging the job market closer to full employment," he
said. "At the same time, the inability for supply to catch up with this demand
drove prices higher and continued to put a tight affordability squeeze on those
trying to reach the market."
new and existing inventory conditions led to several of the largest metro areas
seeing near or above double-digit appreciation, which has pushed home values to
record highs in a slight majority of markets. The exception for the most part
is in the Northeast, where price growth is flatter because of healthier supply
says there was a 5.7 percent annual increase in the national median existing
single-family home price, rising from $222,300 in the fourth quarter of 2015 to
$235,000. The year-over-year gain in the
third quarter was 5.4 percent.
The existing home inventory of 1.65
million homes for sale at the end of the year was 6.3 percent below the
inventory of 1.76 million homes a year earlier and the lowest supply since NAR
began tracking it in 1999. At the
present rate of sales, that is estimated to be a 3.9-month supply. A year earlier there was a 4.6-month supply.
Given the current shortage of homes
for sale and the potential for rising interest rates, NAR President William E.
Brown is advising homebuyers to get a jump on the spring market. "There are
fewer listings on the market, but also a little less competition than what's
expected this spring. Buyers may find just the home they're looking for at a
good price and without the possibility of having to outbid others."
Prices for condo and cooperatives,
reported for 61 metro areas, increased 6.1 percent in the fourth quarter
compared to a year earlier, from $209,300 to $222,000. Median condo prices were higher in 93 percent
of the markets covered by NAR.