The National Association of Realtors (NAR) reports that median home prices continue to increase in cities across the U.S. A total of 133 out of 150 metro areas noted price increases for the first quarter of the year and NAR analysts say most of these markets are tilted in the seller’s favor. Experts say total existing-home sales are at their highest since the fourth quarter of 2009 and even though it’s a seller’s market prices are still affordable enough for buyers to take advantage of good bargains, particularly when compared to prices before housing market collapse. For more on this continue reading the following article from Property Wire.
Median home prices in Metropolitan areas in the United States continued to rise in the first quarter, with the national gain showing the best year on year performance in over seven years, according to the latest quarterly report from the National Association of Realtors.
The median existing single family home price rose in 133 out of 150 metropolitan statistical areas based on closings in the first quarter of 2013 compared with first quarter last year, while 17 areas had price declines.
In the fourth quarter of 2012, a comparable 133 areas showed price increases from a year earlier, greatly improved from the first quarter of 2012 when prices in only 74 metros were up.
Lawrence Yun, NAR chief economist, said that 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 1 to 2% above the rate of inflation. If home builders can continue to ramp up production, then home price growth is expected to moderate in 2014,’ he added.
At the end of the first quarter there were 1.93 million existing homes available for sale, which is 16.8% below the close of the first quarter of 2012, when 2.32 million homes were on the market.
The national median existing single family home price was $176,600 in the first quarter, up 11.3% from $158,600 in the first quarter of 2012. Yun said that this is the strongest year on year price increase since the fourth quarter of 2005 when the median price jumped 13.6%. In the fourth quarter of 2012 the median price rose 10% from a year earlier.
‘Some of the previously hard-hit markets like Phoenix, Sacramento and Miami continue to experience a dramatic turnaround, while a new set of areas like Atlanta, Minneapolis and Seattle have begun to show strong signs of upward momentum,’ Yun said.
Total existing-home sales, including single family and condos, edged up 0.8% to a seasonally adjusted annual rate of 4.94 million in the first quarter from 4.90 million in the fourth quarter, and were 9.8% above the 4.50 million pace during the first quarter of 2012.
Yun explained that sales were at the highest level since the fourth quarter of 2009, when they reached 4.95 million as buyers responded to tax incentives.
NAR president Gary Thomas said conditions remain favourable for buyers. ‘Even with rising home prices, there is still plenty of buying power in the market. Historically low mortgage interest rates and home prices that remain well below their peak mean most buyers can purchase well within their means, assuming they meet ongoing stringent credit standards,’ he explained.
Yun also pointed out that a separate breakout of qualifying incomes to purchase a median priced existing single family home on a metropolitan area basis demonstrates ample buying power in the current market. Income requirements are determined using several scenarios on down payment percentages and assume 25% of gross income devoted to mortgage principal and interest at a mortgage interest rate of 3.5%.
The national median family income was $62,200 in the first quarter. However, to purchase a home at the national median price, a buyer making a 5% down payment would only need an income of $36,500. With a 10% down payment the required income would be $34,600, while with 20% down, the necessary income is $30,700.
The national median existing condo price was $172,400 in the first quarter, up 10.4% from the first quarter of 2012. Some 39 metros showed increases in their median condo price from a year ago and 15 areas had declines.
Regionally, existing home sales in the Northeast rose 4.4% in the first quarter and are 9.1% above the first quarter of 2012. The median existing single family home price in the Northeast rose 2.9% to $234,000 in the first quarter from a year ago.
In the Midwest, existing-home sales increased 1.2% in the first quarter and are 15% higher than a year ago. The median existing single family home price in the Midwest increased 8.2% to $135,100 in the first quarter from the same quarter last year.
Existing home sales in the South edged up 0.7% in the first quarter and are 13.3% above the first quarter of 2012. The regional median existing single family home price was $156,800 in the first quarter, up 9.3% from a year earlier.
In the West, which is the region most impacted by limited housing supplies, existing home sales slipped 1.1% in the first quarter but are 0.6% above a year ago. The median existing single family home price in the West jumped 24.4% to $247,800 in the first quarter from the first quarter of 2012.
This article was republished with permission from Property Wire.