Q4: Home prices on the rise in 94% of metro areas
Fourth quarter home prices increased year-over-year in 94 percent of markets measured—up from the third quarter’s 93 percent share. The fourth quarter’s national median existing single-family home price was $274,900 - up 6.6 percent from the fourth quarter of 2018.
“It’s challenging—especially for those potential buyers—where we have a good economy, low interest rates and a soaring stock market, yet are finding very few homes available for sale,” explains NAR’s chief economist, Lawrence Yun. “We saw prices increase during every quarter of 2019 above wage growth.”
Total inventory at the end of Q4 2019 was down 8.5 percent from 2018’s fourth quarter, with the average supply at 3.5 months—down from Q4 2018’s 4.0 months.
A need for balance
“Rising home values typically create wealth gains for existing homeowners as shown in NAR’s latest study, however, areas that are deemed ‘too expensive’ will obviously have trouble attracting residents and companies looking to do business there,” says Yun. “We need a good balance that benefits both current and future homeowners, but right now, the balance is still in favor of home sellers.”
Even in America’s most expensive metro areas, prices are continuing to rise, with only one of the top 10 seeing a year-over-year decline in single-family sales prices.
- San Jose, Calif.: $1.246 million, -0.3 %
- San Francisco, Calif.: $990,000, +3.9%
- Anaheim-Santa Ana, Calif.: $828,000, +3.6%
- Urban Honolulu, Hawaii: $812,600, 0%
- San Diego, Calif.: $655,000, +4.6%
- Boulder, Colo.: $630,400, +6.4%
- Los Angeles-Long Beach, Calif.: $617,300, +7.2%
- Seattle-Tacoma, Wash.: $528,800. +8%
- Nassau County, N.Y.: $496,600, +3.7%
- Boston-Cambridge, Mass.: $428,800, +4.9%
A silver lining
Despite the increase in home prices, 2019’s falling mortgage rates are enticing first-time buyers, making it more affordable for a family to afford monthly mortgage payments. The fourth quarter’s 30-year fixed-rate average was 3.76 percent—down from last year’s 4.95 percent. And while median family income is also on the rise, first-time homebuyer affordability hasn’t completely unraveled.
Home price growth across the regions
Median home prices were up across the board in comparison to last year:
- West: +7.3%
- Midwest: +6.8%
- South: +6.1%
- Northeast: +5.8%