Despite rising home prices in U.S.
metropolitan areas in the first quarter, the National Association of Realtors® (NAR)
said today that home affordability remains high. The year-over-year price increase posted in
Quarter One was the largest in over seven years but NAR figures show that the
typical buyer earns nearly double the income needed to purchase a median priced
home in his or her area.
The median price of an existing
single-family home rose to $176,600 in the first quarter compared to $158,600 a
year earlier, an 11.3 percent jump and the strongest increase since Q4 2005
when the increase was 13.6 percent. Of
the 140 metropolitan statistical areas (MSA) tracked by NAR 133 showed an
annual increase in median prices; the same number which showed an annual increase in Q4 but
nearly double the number, 74, with such a year-over-year improvement in the
first quarter of 2012.
NAR said that some of the price increase
reflected a shrinking market share of lower priced homes and distressed sales
and greater activity in the higher price ranges. Distressed sales had a 23 percent share of the
market in the first quarter compared to a 32 percent share a year earlier.
Median prices of condo and condominium prices located in metropolitan areas rose
4 percent on an annual basis in the first quarter, to $172,400. Thirty-nine metros out of the 54 tracked by
NAR showed increases in their median condo price from a year ago and 15 areas
Lawrence Yun, NAR chief economist, said
many areas are experiencing a seller's market. "The supply/demand balance
is clearly tilted toward sellers in a good portion of the country," he
said. "Inventory conditions are expected to remain fairly constrained this
year, so overall price increases should be well above the historic gain of
one-to-two percentage points above the rate of inflation. If home
builders can continue to ramp up production, then home price growth is expected
to moderate in 2014."
Total existing-home sales including single-family and condos rose 0.8
percent to a seasonally adjusted annual rate of 4.94 million in the first
quarter, the highest since the fourth quarter of 2009 when homebuyer tax
credits were in place. The rate was an
increase of 4 percent from the fourth quarter pace of 4.90 million and 9.8
percent higher than a year earlier.
NAR said that to qualify to purchase a
home at the national median price during the first quarter a borrower with a 20
percent downpayment would need an income of $30,700. With only a five percent downpayment the
qualifying income would be $36,500. The
national median income was $62,200.
At the end of the first quarter there were 1.93 million existing homes
available for sale, which is 16.8 percent below the close of the first quarter
of 2012, when 2.32 million homes were on the market.
Existing-home sales in the Northeast rose 4.4 percent in the first quarter
and are 9.1 percent above the first quarter of 2012. The median existing
single-family home price in the Northeast rose 2.9 percent to $234,000 in the
first quarter from a year ago.
In the Midwest, existing-home sales increased 1.2 percent in the first
quarter and are 15.0 percent higher than a year ago. The median existing
single-family home price in the Midwest increased 8.2 percent to $135,100 in
the first quarter from the same quarter last year.
Existing-home sales in the South edged up 0.7 percent in the first quarter
and are 13.3 percent above the first quarter of 2012. The regional median
existing single-family home price was $156,800 in the first quarter, up 9.3
percent from a year earlier.
In the West, which is the region most impacted by limited housing supplies,
existing-home sales slipped 1.1 percent in the first quarter but are 0.6
percent above a year ago. The median existing single-family home price in
the West jumped 24.4 percent to $247,800 in the first quarter from the first
quarter of 2012.