The five lowest-cost metro areas in the fourth quarter were Cumberland, Maryland, $84,600 Youngstown-Warren-Boardman, Ohio, $90,200 Decatur, Illinois, $100,000 Binghamton, New York, $108,900 and Wichita Falls, Texas, $110,400. The five most expensive housing markets in the fourth quarter were the San Jose, California metro area, where the median existing single-family price was $1,270,000 San Francisco-Oakland-Hayward, California, $920,000 Anaheim-Santa Ana-Irvine, California, $785,000 urban Honolulu, $760,600 and San Diego-Carlsbad, $610,000. “In areas where home building has severely lagged job creation in recent years, it’s going to be a slow slog before there’s enough new construction to cool price appreciation to a pace that aligns more closely with incomes.” “While tight supply is expected to keep home prices on an upward trajectory in most metro areas in 2018, both the uptick in mortgage rates and the impact of the new tax law on some high-cost markets could cause price growth to moderate nationally,” said Yun. To purchase a single-family home at the national median price, a buyer making a 5% down payment would need an income of $55,585 a 10% down payment would require an income of $52,659, and $46,808 would be needed for a 20% down payment. The national family median income rose to $74,492 in the fourth quarter, but overall affordability still edged downward compared to a year ago because of the combination of rising mortgage rates and home prices. The average supply during the fourth quarter was 3.5 months – down from 4.2 months in the fourth quarter of last year. Total existing-home sales, including single family and condos, increased 4.3% to a seasonally adjusted annual rate of 5.62 million in the fourth quarter from 5.39 million in the third quarter, and are 1.3% higher than the 5.55 million pace during the fourth quarter of 2016.Īt the end of the fourth quarter, there were 1.48 million existing homes available for sale, which was 10.3% below the 1.65 million homes for sale at the end of the fourth quarter in 2016. In the West region, where very healthy labor markets are driving demand, the gap is even wider.”Īdded Yun, “These consistent, multi-year price gains have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation however, the shortage of new homes being built over the past decade is really burdening local markets and making home buying less affordable.” “Remarkably, home prices have risen a cumulative 48% since 2011, yet during this same time frame, incomes are up only 15%. “A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices,” he said. Lawrence Yun, NAR chief economist, said 2017 capped off another year where home prices in most markets ascended at a steady clip amidst improving sales and worsening inventory conditions. Courtesy Adobe Stock/Andy Dean Photography
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