2019’s First Quarter Report: Metro home prices increase 3.9%
In the first quarter of 2019, both inventory and metro market prices increased, with the national median existing single-family home price rising to $254,800—3.9 percent higher than in the first quarter of 2018. Of the measured markets last quarter, 86 percent of single-family home prices increased, with 7 percent of metro areas seeing double-digit increases. Though these numbers are increasing, they are moving at a slower pace from quarters prior.
NAR chief economist, Lawrence Yun weighed in stating, “Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year.”
Total existing-home sales increased 1.2 percent from last quarter to a seasonally adjusted annual rate of 5.207 million in 2019’s first quarter, which is 5.4 percent lower than a year ago.
While the national family median income increased to $77,7524 in the first quarter, higher home prices decreased overall affordability. “There are vast home price differences among metro markets,” Yun explains. “The condition of extremely high home prices may not be sustainable in light of many alternative metro markets that are much more affordable. Therefore, a shift in job search and residential relocations into more affordable regions of the country is likely in the future.”
The top five most expensive housing markets of 2019’s first quarter include: San-Jose Sunnyvale-Santa Clara, Calif., San Francisco-Oakland-Hayward, Calif., Anaheim-Santa Ana-Irvine, Calif., Urban Honolulu, Hawaii and San Diego-Carlsbad, Calif., with median existing single-family home prices ranging from $1,220,000 to $620,000. The five lowest-cost metro areas range from $80,800 to $107,200 including: Decatur, Ill., Youngstown-Warren-Boardman, Ohio, Elmira, N.Y., Cumberland, Md. and Binghamton, N.Y.
In response to slower price gains and buyer pullback, Yun urges the construction industry to increase affordable housing units. “More supply is needed to provide better homeownership opportunities, taming home price growth and widening the inventory choices for consumers. Housing Opportunity Zones could provide the necessary financial benefits for homebuilders to construct moderately priced-homes.”
Despite some growth in existing-home sales from the previous quarter, overall numbers are down in comparison to 2018’s first quarter. A regional breakdown shows that the Northeast is down 1%, the Midwest is down 5.5%, the South is down 4% and the West is down 10.7%.
In looking at median existing single-family home prices, all regions saw an increase from last year, with the Northeast up 3.7%, the Midwest up 3.9 percent, the South up 2.5 percent and the West up 3.5%.