Home prices rose in nearly every corner of the country in
the first quarter, showing little sign of fading soon with limited housing
inventory and robust buyer demand.
The median sales price for existing single-family homes was
higher in the quarter compared with a year ago for 182 of the 183 metro areas
tracked by the National Association of Realtors, the association said Tuesday.
In 89% of those metro areas, median prices rose by more than 10% from a year
The current home-sales boom has been unusually widespread,
with low mortgage interest rates fueling strong demand across the U.S.,
especially for high-end properties. The shortage of homes on the market is also
affecting home shoppers around the country. The number of active listings on Realtor.com
was down 52% from a year earlier in the week ended May 1. ( News Corp, parent
of The Wall Street Journal, operates Realtor.com.)
“The record-high home prices are happening across nearly all
markets, big and small, even in those metros that have long been considered
off-the-radar in prior years for many home seekers,” said Lawrence Yun, NAR’s
chief economist. “With low inventory already impacting the market, added
skyrocketing costs have left many families facing the reality of being priced
Many of the metro areas that posted the strongest price
increases in the first quarter were vacation destinations, as second-home
demand surged during the pandemic and continues to remain robust. The biggest
gainer was Kingston, N.Y., with a 35.5% median-price increase from a year
earlier. Kingston is in New York’s Hudson Valley, where many city dwellers
temporarily or permanently relocated in the past year.
Following Kingston was the Bridgeport, Conn., metro area, up
34.3%, and Atlantic City, N.J., up 34%.
The only metro area to post a decline in the first quarter
from a year earlier was Springfield, Ill., where median prices fell 2.4%, the
Nationwide, the median existing-home sales price rose 16.2%
in the first quarter to $319,200, a record high in data going back to 1989, NAR
Prices are rising so rapidly they are outweighing the
benefit of rock-bottom borrowing rates. In the first quarter, the typical
monthly mortgage payment rose to $1,067, from $995 a year earlier, the NAR
said, even as mortgage rates declined.
Economists say the pace of price increases is likely to slow
later in the year as more people are priced out of the market. But in many
metro areas, demand would still exceed the available supply even if some buyers
dropped out, real-estate executives say.
“Despite an 11% increase in our average sales price over the
last year, demand for our homes has never been higher,” said Eric Lipar, chief
executive of home builder LGI Homes Inc., in an earnings call this month.
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