Nearly nine in 10 metro areas posted home-price gains in the fourth quarter

WASHINGTON — Approximately nine out of 10 metro markets registered home-price gains in the fourth quarter of 2022, despite mortgage rates eclipsing 7 percent, according to the National Association of Realtors’ latest quarterly report. Eighteen percent of the 186 tracked metro areas registered double-digit price increases over the same time period, down from 46 percent in the third quarter of 2022.

Compared to a year ago, the national median singlefamily existing-home price rose 4.0 percent to $378,700. Year-over-year price appreciation decelerated when compared to the previous quarter’s 8.6 percent.

“A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42 percent in the past three years,” NAR Chief Economist Lawrence Yun said, noting that these cost increases have far surpassed wage increases and consumer price inflation of 15 percent and 14 percent, respectively, since 2019.

Among the major U.S. regions, the South saw the largest share of single-family existing-home sales (45 percent) in the third quarter, with year-overyear price appreciation of 4.9 percent. Prices grew 5.3 percent in the Northeast, 4.0 percent in the Midwest and 2.6 percent in the West.

“Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets,” Yun added.

The top 10 metro areas with the largest year-over-year price increases all recorded gains of at least 14.5 percent. The top 10 include Farmington, New Mexico (20.3 percent); North Port-Sarasota-Bradenton, Florida (19.5 percent); Naples-Immokalee-Marco Island, Florida (17.2 percent); Greensboro-High Point, North Carolina (17.0 percent); Myrtle Beach-Conway-North Myrtle Beach, South CarolinaNorth Carolina (16.2 percent); Oshkosh-Neenah, Wisconsin (16.0 percent); Winston-Salem, North Carolina (15.7 percent); El Paso, Texas (15.2 percent); Punta Gorda, Florida (15.2 percent); and Deltona-Daytona Beach-Ormond Beach, Florida (14.5 percent).

Half of the top 10 most expensive markets in the U.S. were in California, including San Jose-Sunnyvale-Santa Clara, California ($1,577,500; -5.8 percent); San FranciscoOakland-Hayward, California ($1,230,000; -6.1 percent); Anaheim-Santa Ana-Irvine, California ($1,132,000; -1.6 percent); Urban Honolulu, Hawaii ($1,090,200; 3.4 percent); San Diego-Carlsbad, California ($857,000; 1.4 percent); Los Angeles-Long Beach-Glendale, California ($829,100; -1.3 percent); Naples-Immokalee-Marco Island, Florida ($802,500; 17.2 percent); Boulder, Colorado ($759,500; -2.0 percent); Seattle-Tacoma-Bellevue, Washington ($708,900; 1.3 percent); and Barnstable Town, Massachusetts ($668,100; 4.0 percent).

Roughly one in 10 markets (11 percent; 20 of 186) experienced home-price declines in the fourth quarter of 2022.

“A few markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and higher instances of residents moving to other areas,” Yun added.

In the fourth quarter of 2022, housing affordability was exacerbated by elevated home prices and mortgage rates that roughly doubled from the beginning of the year. The monthly mortgage payment on a typical existing single-family home with a 20 percent down payment was $1,969. This represents a 7 percent increase from the third quarter of last year ($1,838) but a major surge of 58 percent — or $720 — from one year ago. Families typically spent 26.2 percent of their income on mortgage payments, up from 25 percent in the prior quarter and 17.5 percent one year ago.

Once again, first-time buyers looking to purchase a typical home during the fourth quarter of 2022 encountered challenges related to housing’s growing unaffordability. For a typical starter home valued at $321,900 with a 10 percent down-payment loan, the monthly mortgage payment rose to $1,931, about 7 percent more than the previous quarter ($1,806) and an increase of almost $700, or 57 percent, from one year ago ($1,233). First-time buyers typically spent 39.5 percent of their family income on mortgage payments, up from 37.8 percent in the previous quarter. A mortgage is considered unaffordable if the monthly payment (principal and interest) amounts to more than 25 percent of the family’s income.

A family needed a qualifying income of at least $100,000 to afford a 10 percent down payment mortgage in 71 markets, up from 59 in the prior quarter. Yet a family needed a qualifying income of less than $50,000 to afford a home in 16 markets, down from 17 in the previous quarter.