Home Prices Show Signs of Cooling
The majority of metro areas in the first quarter continued to show price growth, but the gains are smaller than previous quarters, the National Association of REALTORS® says in its latest quarterly housing report.
Median existing single-family home prices rose in 74 percent of the 170 metro areas measured, based on closings in the first quarter compared with the first quarter of 2013. Twenty-two percent of the areas – or 37 – showed double-digit increases. For comparison, in the fourth quarter of 2013, 26 percent of metros had registered double-digit gains.
“The cooling rate of price growth is needed to preserve favorable housing affordability conditions in the future, but we still need more new-home construction to fully alleviate the inventory shortages in much of the country,” says Lawrence Yun, NAR’s chief economist. “Limited inventory is creating unsustainable and unhealthy price growth in some large markets, notably on the West Coast.”
The five most expensive housing markets in the first quarter were: San Jose, Calif., metro area, where the median existing single-family price was $808,000; San Francisco, $679,800; Honolulu, $672,300; Anaheim-Santa Ana, Calif., $669,800; and San Diego, $483,000.
Meanwhile, the five lowest-cost metro areas were: Youngstown-Warren-Boardman, Ohio, with a median single-family home price of $64,600 in the first quarter; Decatur, Ill., $69,600; Toledo, Ohio, $72,100; Rockford, Ill., $73,100; and Cumberland, Md., $81,400.
Overall, the national median existing single-family home price was $191,600 in the first quarter, up 8.6 percent from $176,400 in the first quarter of 2013, NAR reports.
At the end of the first quarter, inventories of for-sale homes did show some growth. There were 1.99 million existing homes available for sale at the end of the first quarter -- 3.1 percent higher than year-ago levels. The average supply during the quarter was five months. A supply of six to seven months is considered a healthy balance for the market.