Double-digit home price gain recorded in 15% of metro areas

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Double-digit home price gain recorded in 15% of metro areas

The housing market ended 2023 in complex fashion, with most US metro areas witnessing a rise in home prices amid fluctuating mortgage rates, according to the National Association of Realtors.

Its latest report found that in the fourth quarter of 2023, 189 out of 221 metro areas saw an 86% increase in single-family existing-home sales prices from the previous quarter. This growth pushed the national median single-family existing-home price up by 3.5% to $391,700, even as the 30-year fixed mortgage rate slumped from 7.79% to 6.61%.

“Homeowners have benefited from housing wealth accumulation. However, many homebuyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year,” said NAR chief economist Lawrence Yun. “This doubling in housing costs for recent home buyers is not included in the official consumer price index inflation calculations and contributes to the sense of dissatisfaction about the economy.”

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The report also highlighted that 15% of the markets experienced double-digit price appreciation, an increase from 11% in the prior quarter. Despite challenges such as limited inventory, Yun remains optimistic about the future as “increased homebuilding, along with lower mortgage rates, will not only improve housing affordability but also help bring more homes on to the market in 2024.”

Among the noteworthy findings, the top 10 metro areas with the largest median price increases saw gains of at least 14.8%, with areas such as Dayton, Ohio, and Kingsport-Bristol-Bristol, Tenn.-Va. leading the charge.

California continued to dominate the list of the most expensive markets, with eight of the top 10 being located in the state. Leading the pack was San Jose-Sunnyvale-Santa Clara, California, where the median home price stood at $1,750,300, marking an 11% increase. This was followed by Anaheim-Santa Ana-Irvine, California, at $1,299,500 with a 14.8% increase and San Francisco-Oakland-Hayward, California, at $1,251,000, experiencing a 4.3% increase.

Other California markets included Salinas at $993,900 with a 17.1% increase, San Diego-Carlsbad at $931,600 with an 8.7% increase, Oxnard-Thousand Oaks-Ventura at $916,800 with a 7.9% increase, and San Luis Obispo-Paso Robles at $912,100 with a 5.7% increase. Los Angeles-Long Beach-Glendale, California, also featured on the list at $884,400 with a 6.7% increase, alongside Boulder, Colorado, rounding out the top 10 with an $849,400 median price and an 11.8% increase.

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