91 percent of metro areas saw an increase in home prices in 2019’s second quarter
Of the measured markets in the second quarter, 162 of 178 metropolitan statistical areas showed sales price gains, with single-family median home prices increasing year-over-year in 91 percent of measured markets. Up 4.3 percent from 2018’s second quarter, the national median existing single-family home price was $279,600.
The metro areas that reported decline include the following high-cost areas where median home prices are $500,000 and above: San Jose-Sunnyvale-Santa Clara, Calif. (-5.3 percent), San Francisco-Oakland-Hayward, Calif. (-1.9 percent), Urban Honolulu, Hawaii (-1.2 percent), Boulder Colo. (-0.9 percent) and Bridgeport-Stamford-Norwalk, Conn (-0.6 percent).
Chief economist for the National Association of Realtors® (NAR), Lawrence Yun, calls on builders to increase the amount of homes on the market. “New home construction is greatly needed; however, home construction fell in the first half of the year,” he explains. “This leads to continuing tight inventory conditions, especially at more affordable price points. Home prices are mildly reaccelerating as a result.”
Yun continues on to explain that even with a steady job market, many of the homes on the market remain unaffordable for families. “Housing unaffordability will hinder sales irrespective of the local job market conditions,” he says. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”
While the national family median income has risen in the second quarter, greater home price growth led to an overall decrease in affordability from last quarter. For example, families attempting to pay no more than 25 percent on mortgage payments in San Jose would need $295,832 and buyers in San Francisco would need $233,552.
Total inventory for existing-homes available at the end of 2019’s second quarter were about equal with the end of 2018’s numbers, with 1.93 million existing homes available for sale. And the average supply increased from 4.3 months in 2018’s second quarter to 4.4 months in 2019’s second quarter.
Yun weighs in on housing affordability, voicing concerns over the potential for weakening economic confidence. “The exceptionally low mortgage rates will help with housing affordability over the short run. But if the low interest rates are due to weakening economic confidence, as reflected from a correction in the stock market, then the low rates will not help with job growth and will eventually hinder home buying and home construction.”