Us house prices see best annual growth in seven years
The median existing single-family home price rose in 133 out of 150 metropolitan statistical areas in the first quarter of 2013 compared with the same period in 2012. In the fourth quarter of 2012, a comparable 133 areas showed price increases from a year earlier, greatly improved from the first quarter of 2012 when prices in only 74 metros were up.
The national median existing single-family home price was $176,600 in the first quarter, up 11.3 percent from $158,600 in the first quarter of 2012. This is the strongest year-over-year price increase since the fourth quarter of 2005 when the median price jumped 13.6 percent. In the fourth quarter of 2012 the median price rose 10.0 percent from a year earlier.
Lawrence Yun, NAR chief economist, said many areas are experiencing a seller’s market. “The supply/demand balance is clearly tilted toward sellers in a good portion of the country,” he said. “Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation. If home builders can continue to ramp up production, then home price growth is expected to moderate in 2014.”
At the end of the first quarter there were 1.93 million existing homes available for sale, which is 16.8 percent below the close of the first quarter of 2012, when 2.32 million homes were on the market.
“Some of the previously hard-hit markets like Phoenix, Sacramento and Miami continue to experience a dramatic turnaround, while a new set of areas like Atlanta, Minneapolis and Seattle have begun to show strong signs of upward momentum,” Yun said.
The median price is where half of the homes sold for more and half sold for less. However, some of the elevated median prices reflect a shrinking market share of lower priced homes and greater activity in upper priced transactions.
Total existing-home sales, including single-family and condo, also increased by 0.8 percent to a seasonally adjusted annual rate of 4.94 million in the first quarter - 9.8 percent above the first quarter of 2012. Indeed, sales were at the highest level since the fourth quarter of 2009, when they reached 4.95 million as buyers responded to tax incentives.
A separate breakout of qualifying incomes to purchase a median-priced existing single-family home on a metropolitan area basis demonstrates ample buying power in the current market.
The national median family income4 was $62,200 in the first quarter. However, to purchase a home at the national median price, a buyer making a 5 percent downpayment would only need an income of $36,500. With a 10 percent downpayment the required income would be $34,600, while with 20 percent down, the necessary income is $30,700.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said conditions remain favorable for buyers. “Even with rising home prices, there is still plenty of buying power in the market,” he said. “Historically low mortgage interest rates and home prices that remain well below their peak mean most buyers can purchase well within their means, assuming they meet ongoing stringent credit standards.”