Home Price Surge Continued in Fourth Quarter
Home prices continue to climb, adding to homeowner wealth and putting buyers into the position of considering how much home they can afford.
The median sales price of single-family existing-home sales increased nearly 15% year over year to $361,700 in the fourth quarter, the National Association of REALTORS® reported Thursday. That is down slightly from a 15.9% gain in the prior quarter.
“Homebuyers in the last quarter saw little relief as home prices continued to climb, albeit not as fast as earlier in the year,” says Lawrence Yun, NAR’s chief economist. “The increasing prices are indicative of a seller’s market, with an abundance of eager buyers and very limited supply.”
Two-thirds of 183 metros posted double-digit price appreciation in the fourth quarter. The higher home prices are tightening housing affordability, NAR’s report says. Rises in mortgage rates could compound the issue even more. Monthly mortgage payments on a typical single-family existing home with a 20% down payment are $201 higher than a year ago, reaching $1,240. That comprises 16.9% of the median family income, according to NAR data.
“The strength of price gains is associated with the strength of the local job market, but the escalating prices took a toll on home shoppers, compelling many to come up with extra cash, and forcing others to delay making a purchase altogether,” says Yun. “A number of families, especially would-be first-time buyers, are increasingly being forced out of the market, and this is why supply is critical to expanding homeownership opportunity.”
Yun says buyers should be optimistic: “Home prices should begin to normalize later in 2022 as more homes come on the market.”
Areas Posting the Highest Price Increases
Metros in the Sunbelt and Mountain states topped the list of areas with the highest yearly price gains. According to NAR, the largest price increases in the fourth quarter were in:
- Punta Gorda, Fla.: 28.7%
- Ocala, Fla.: 28.2%
- Austin-Round Rock, Texas: 25.8%
- Phoenix-Mesa-Scottsdale, Ariz.: 25.7%
- Sherman-Denison, Texas: 25.1%
- Tucson, Ariz.: 24.9%
- Las Vegas-Henderson-Paradise, Nev.: 24.7%
- Ogden-Clearfield, Utah: 24.7%
- Salt Lake City: 24.4%
- Boise City-Nampa, Idaho: 24.3%
The 10 Overall Priciest Housing Markets
The most expensive markets in the fourth quarter continued to see even higher prices in the fourth quarter; nine of the top 10 saw double-digit percentage increases, according to NAR’s research. California led the way with five metros in the top 10.
The 10 priciest markets in the fourth quarter are:
- San Jose-Sunnyvale-Sta. Clara, Calif.: $1.675 million; up 19.6%
- San Francisco-Oakland-Hayward, Calif.: $1.31 million; up 14.9%
- Anaheim-Santa Ana-Irvine, Calif.: $1.15 million; up 23%
- Urban Honolulu: $1.055 million; up 16.8%
- San Diego-Carlsbad, Calif.: $845,000; up 14.2%
- Los Angeles-Long Beach-Glendale, Calif.: $797,900; up 15.9%
- Boulder, Colo.: $775,100; up 17.2%
- Seattle-Tacoma-Bellevue, Wash.: $700,000; up 13.9%
- Naples-Immokalee-Marco Island, Fla.: $685,000; up 21.2%
- Nassau County-Suffolk County, N.Y.: 644,600; up 9%