by The Northeast saw the largest increase during the 1st quarter followed by the Midwest and South
WASHINGTON — A recent report from the National Association of Realtors indicates that home prices continue to rise in many major markets, putting added financial pressure on consumers in an environment of ongoing high gas prices and other day-to-day expenses.
According to its survey, home prices rose in 71% or 167 of 235 major metro markets during the first quarter. While down from 73% in the fourth quarter, there was a 2% increase in the number of metro areas that had double-digit price increases (7% or 16 out of 235 compared with 12 out of 235 in the prior quarter).
The NAR said the national median single-family home price rose to $404,300, up .5% from the same period last year. The Northeast saw the highest percentage increase, up 4.9% to $506,500 compared with the Midwest, which saw prices rise 3.6% to $308,100. Prices in the South rose .2% to $362,300, while in the West they declined 2.9% to $607,600.
“Home prices continued to increase in many markets, boosting housing wealth for most homeowners,” said NAR Chief Economist Lawrence Yun. “Gains were particularly solid across metro areas in the Northeast, where inventory shortages persist, and in the Midwest, where home prices remain relatively affordable. However, the expensive West region did not see an increase in sales.”
He added that the condominium market is stabilizing after having weakened last year. In addition, condominiums also are seeing some higher price gains in some markets.
And while he noted that mortgage rates are higher than earlier this year, they are below last year’s levels, which he said “will allow more potential buyers to qualify for and obtain a mortgage.”
The report went on to note that these 10 markets had the largest year-over-year median price increase:
- Akron, Ohio (+12.0%)
- Anchorage, Alaska (+10.4%)
- Albany-Schenectady-Troy, N.Y. (+9.3%)
- Trenton, N.J. (+9.2%)
- Davenport-Moline-Rock Island, Iowa-Ill. (+9.2%)
- Canton-Massillon, Ohio (+7.9%)
- Milwaukee-Waukesha-West Allis, Wis. (+7.7%)
- St. Louis, Mo.-Ill. (+7.4%)
- Reading, Pa. (+7.4%)
- Rochester, N.Y. (+7.2%)
It identified the following as the 10 most expensive markets
- San Jose-Sunnyvale-Santa Clara, Calif. ($2,030,000; +0.5%)
- Anaheim-Santa Ana-Irvine, Calif. ($1,442,900; -0.5%)
- San Francisco-Oakland-Hayward, Calif. ($1,350,000; +2.3%)
- Urban Honolulu, Hawaii ($1,175,100; +0.9%)
- San Diego-Carlsbad, Calif. ($1,050,000; +1.3%)
- San Luis Obispo-Paso Robles, Calif. ($956,800; +0.4%)
- Oxnard-Thousand Oaks-Ventura, Calif. ($944,200; +1.4%)
- Salinas, Calif. ($943,500; -1.2%)
- Los Angeles-Long Beach-Glendale, Calif. ($858,500; -0.5%)
- Naples-Immokalee-Marco Island, Fla. ($845,000; -2.3%)
Other highlights of the report are as follows:
+ 27% of markets experienced declining home prices, up from 17% last year and up from 25% last quarter.
+ The average monthly mortgage payment on a typical single-family home with a 20% down payment is $1,979, down $140 from last year and down $78 from last quarter.
+ Families are paying about 21.5% of their average income on a mortgage payment, down from 24.3% last year and down from 22.9% last quarter.
+ With a 10% down payment, first-time buyers are spending about $1,943 on a monthly mortgage payment for a starter home valued at $343,700, down $135 from last year and down $76 from last quarter.
+ First-time buyers are spending 32.5% of their income on a monthly mortgage payment, down from 36.6% last year and down from 34.6% last quarter.
Thus while home prices continue to rise in some major markets, there are some bright spots for consumers, particularly in markets where prices are dropping.
The key is for consumers to choose wisely and within their respective budgets, realizing that there are other expenses that also are part of home ownership including water and electric bills, home maintenance and of course furniture.
Of course the easier furniture stores make it for consumers to afford new furniture, whether through competitive pricing or attractive financing — or a combination of both — the better. By making the product more attractive and affordable, there’s a good chance they’ll keep them shopping for more and also recommending your store to family and friends.
