Home Prices Rise in Most Metro Areas in 2013

Median home prices are up nearly 13% from last year.

The national median price of single-family homes posted its strongest annual growth in nearly eight years in the third quarter of 2013, rising to $207,300, according to data from the NATIONAL ASSOCIATION OF REALTORS®. That’s up 12.5% from $184,300 during the same period in 2012.

The national median existing-condo price was $205,400 in the third quarter, up 15.1% from the third quarter of 2012.

The median existing single-family home price rose in 88% of the 163 metro markets NAR tracks, and in 54 of those markets prices rose by double digits.

“Rising prices and higher interest rates have taken a bite out of housing affordability,” said NAR Chief Economist Lawrence Yun. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”

A Look at Home Affordability 

Even with the erosion in affordability, NAR data show in most markets, buyers with median income can still afford to buy a median-priced home, although that’s less so in pricier areas.

The five most-expensive housing markets were:

  • San Jose, Calif., $805,000
  • San Francisco, $705,000
  • Honolulu, $679,800
  • Anaheim-Santa Ana, Calif., $670,700
  • San Diego, $485,000

The five most-affordable metro areas were:

  • Toledo, Ohio, $87,500
  • Rockford, Ill., $88,900
  • Decatur, Ill., $91,000
  • Ocala, Fla., $103,600
  • Topeka, Kan., $106,900

Distressed Home Sales Down

One important factor in home prices, the proportion of distressed sales, also showed improvement. Distressed homes — foreclosures and short sales generally sold at discount — accounted for 14% of third-quarter sales, down from 24% a year ago.

At the end of the third quarter, 2.21 million existing homes were on the market. At the current sales pace, it would take five months to sell them all. That’s down from a 5.9-month supply at the end of the third quarter of 2012.

Mortgage Rates Up

Since most home purchases involve a mortgage, interest rates have a big influence on home sales. The national commitment rate on a 30-year conventional, fixed-rate mortgage averaged 4.44% in the third quarter, up from 3.69% percent in the second quarter, according to Freddie Mac.

Looking ahead, NAR President Gary Thomas said consumers need to be able to get safe, affordable mortgages in 2014. “NAR firmly believes that hardworking, creditworthy consumers should be able to achieve their dreams of owning a home,” he said. “As legislators and regulators consider reforms to the secondary mortgage market, they must ensure that mortgage capital is available under all economic conditions so that qualified homebuyers have access to safe, affordable loan products.”

Home Sales By Region

The NAR survey also looked at regional existing-home sales and found for the third quarter:

Region Median 3rd-quarter Price No. of Sales
Northeast $256,800 up 10.5%
Midwest $164,700 up 8.8%
South $181,300 up 4.3%
West $289,100 up 3.6%

By: Dona DeZube

Published: November 6, 2013