The National Association of Realtors reported that every metro area it tracks saw third quarter home prices increase from a year ago.
Record-low mortgage rates and low nationwide housing inventory have resulted in median single-family home prices growing year-over-year in all 181 metropolitan statistical areas tracked by NAR.
“Favorable mortgage rates will continue to bring fresh buyers to the market,” said Lawrence Yun, NAR chief economist. “However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.”
According to the NAR’s Metropolitan Median Area Prices and Affordability and Housing Affordability Index for the third quarter, 65% of metros – 117 areas out of 181 – witnessed double-digit price growth from one year ago. In comparison, only 15 metro areas recorded double-digit increases in 2020’s second quarter.
The biggest gainers in the third quarter were Bridgeport, Conn. (27.3%); Crestview, Fla. (27.1%); Pittsfield, Mass. (26.9%); Kingston, N.Y. (21.5%); Atlantic City, N.J. (21.5%); Boise, Idaho (20.6%); Wilmington, N.C. (20.6%); Barnstable, Mass. (19.4%); Memphis, Tenn. (19.1%); and Youngstown, Ohio (19.1%).
The nation’s median existing single-family home price climbed 12% on a year-over-year basis, to $313,500. All four major regions saw double-digit year-over-year price gains, led by the West (13.7%), but followed closely by the Northeast (13.3%), the South (11.4%), and the Midwest (11.1%).
At this rate, home prices were growing four times as fast as median family income, which was 2.9%.
“In light of the pandemic, prices jumped in a number of metros that contain larger properties and open space – where families could find extra rooms, including areas for an at-home office,” said Yun.
Eight of America’s 10 most expensive metro areas are located in the West region, with the remaining two in the East region.
This includes San Jose, Calif. ($1.40 million); San Francisco, Calif. ($1.125 million); Anaheim, Calif. ($910,000); Urban Honolulu, Hawaii ($866,200); San Diego, Calif. ($729,000); Los Angeles, Calif. ($708,900); Boulder, Colo. ($673,400); Seattle, Wash. ($617,700); Bridgeport, Conn. ($591,400); and Boston, Mass. ($588,100).
At the end of the third quarter, 1.47 million existing homes were available for sale, 19.2% lower than total inventory at the end of 2019’s third quarter. As of September 2020, housing inventory totals were equivalent to 2.7 months at the current sales pace.