Home prices continued to grow in the second quarter as an imbalance in supply and demand continued, according to a National Association of Realtors (NAR) report.
During the second quarter, the national median price for an existing single-family home was $255,600, a 6.3% increase from the $240,700 median price in the same quarter a year ago. The jump pushed the second-quarter price past the $241,300 price in the third quarter of 2016 to become the new peak median price.
Single-family home prices in 87% of measured markets — 154 out of 178 metropolitan statistical areas — saw gains during the second quarter. Of the markets, 13% posted median price decreases during the quarter on a yearly basis.
"The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season," said Lawrence Yun, NAR chief economist. "Listings typically flew off the market in under a month — and even quicker in the affordable price range — in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets."
NAR said that although the national family median income increased last quarter, this was not enough to counter weaker affordability given increasing mortgage rates and higher home prices.
"Mortgage rates have subsided in recent months, which has only somewhat helped take away some of the sting prospective buyers are experiencing with the deteriorating affordability conditions in many areas," Yun said. "Household incomes may be rising and giving consumers assurance that now is a good time to buy, but these severe inventory shortages will likely continue to be a drag on sales potential the second half of the year."
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