Nation’s metro home prices rose by 3.9 percent during first quarter
WASHINGTON — Inventory increased and metro market prices rose in the first quarter of 2019, but at a slower pace than the previous quarter, according to the latest quarterly report by the National Association of Realtors. The national median existing single-family home price in the first quarter was $254,800, up 3.9 percent from the first quarter of 2018 ($245,300).
Single-family home prices increased in 86 percent of measured markets last quarter, with 153 of 178 metropolitan statistical areas showing sales-price gains compared to the first quarter a year ago. Thirteen metro areas (7 percent) experienced double-digit increases, down from 14 percent during the fourth quarter of 2018.
Lawrence Yun, chief economist for the NAR, said the first quarter of 2019 has been beneficial to U.S. homeowners.
“Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth,” he said. “A typical homeowner accumulated $9,500 in wealth over the past year.”
Total existing-home sales, including single-family homes and condos, increased 1.2 percent to a seasonally adjusted annual rate of 5.207 million in the first quarter, up from 5.143 million in the fourth quarter of 2018. That’s 5.4 percent lower than the 5.507 million-pace in the first quarter of 2018.
At the end of the first quarter this year, 1.68 million existing homes were available for sale, up 2.4 percent from the 1.64 figure at the end of the first quarter of 2018. Average supply during the first quarter of 2019 was 3.8 months, up from 3.5 months in the first quarter last year.
While the national median income per family rose to $77,752 in the first quarter this year, higher home prices caused overall affordability to decrease from last
year. A homebuyer making a 5 percent down payment would need an income of $60,143 to purchase a single-family home at the national median price, while a 10 percent down payment would require an income of $56,978, and $50,647 would be necessary with a 20 percent down payment.
The five most expensive metro housing markets in the first quarter of 2019 were San Jose-Sunnyvale-Santa Clara, California, where the median existing singlefamily home price was $1,220,000; San Francisco-Oakland-Hayward, California, $930,000; Anaheim-Santa Ana-Irvine, California, $800,000; urban Honolulu, Hawaii $794,100; and San Diego-Carlsbad, California, $620,000.
“There are vast home-price differences among metro markets,” Yun said.
“The condition of extremely high home prices may not be sustainable in light of many alternative metro markets that are much more affordable,” he said. “Therefore, a shift in job search and residential relocations into more affordable regions of the country is likely in the future.”
The five lowest-cost metro areas were Decatur, Illinois, $80,800; Youngstown Warren-Boardman, Ohio, $89,200; Elmira, New York, $90,400; Cumberland, Maryland, $99,300; and Binghamton, New York, $107,200.
Yun continues to call on the construction industry to develop more affordable housing units, which he says will combat slower price gains and buyer pullback.
“More supply is needed to provide better homeownership opportunities, taming home price growth and widening the inventory choices for consumers,” he said. “Housing Opportunity Zones could provide the necessary financial benefits for homebuilders to construct moderately priced homes.”
REGIONAL BREAKDOWN
Total existing-home sales in the Northeast sat at an annual rate of 683,000 (down 1.4 percent from last quarter) and are down only 1.0 percent from a year ago. The median existing single-family home price in the Northeast was $277,200 in the first quarter, up 3.7 percent from a year ago.
In the Midwest, existing-home sales fell 4.0 percent in the first quarter and are 5.5 percent below a year ago. The median existing single-family home price in the Midwest sat at $194,100, a 3.9 percent increase from the first quarter of 2018.
Existing-home sales in the South increased 4.3 percent in the first quarter but were 4.0 percent lower than the first quarter of 2018. The median existing single-family home price in the South was $225,700 in the fourth quarter, 2.5 percent above a year ago.
In the West, existing-home sales in the first quarter grew by 2.8 percent and are 10.7 percent below a year ago. The median existing single-family home price in the West increased 3.5 percent year over year to $384,300.