The national median home price for existing single-family homes reached an all-time high, edging up to $269,000, 5.3 percent higher than the second quarter of 2017, according to the latest quarterly report by the National Association of Realtors.
As inventory across the country remains limited, demand was strong during the spring season. But predicted levels of activity were not met as sales slowed and prices rose.
“The ongoing supply crunch affecting much of the country worsened for most of the second quarter, as the growing number of interested buyers in many markets overwhelmed what was already a meager level of available listings,” said Lawrence Yun, NAR chief economist. “With not enough homes for sale, multiple bids caused prices to rise briskly and further out of the reach of some prospective buyers.”
The NAR report notes that single-family home prices grew in 90 percent of measured markets, while 13 percent of markets saw double-digit increases. In fact, last quarter, both the San Francisco and San Jose metro areas had a median sales price above $1 million.
Regarding total sales of existing homes, including single family and condos, there was a 1.7 percent decrease to a seasonally adjusted rate of 5.41 million in the second quarter from the 5.51 million rate in the first quarter.
By the end of the second quarter, nearly 2 million existing homes were for sale, 0.5 percent more than number of homes for sale at the same time last year. NAR reported that the average supply during the second quarter was 4.1 months, down just 0.1 month in the second quarter of 2017.
Although total sales fell in the second quarter, the national median family income grew to $75,106. Even so, affordability decreased within the last year due to rising mortgage rates and home prices.
“The unaffordable conditions in many of the largest metro areas – especially in the West – continues to be a growing concern for many middle-class households aspiring to buy a home,” said Yun. “Homebuilders, facing higher costs and labor shortages, are simply not producing enough affordable homes to satisfy demand. Local governments need to acknowledge this glaring issue and ease some of the zoning laws, permitting processes and regulations that are slowing construction.”
Both single-family home and condo prices rose in about 90 percent of measured markets since one year ago. A majority of the most expensive metro markets last year were on the West Coast, while the lowest priced were scattered from the Midwest to the Northeast. In the South particularly, existing home sales fell nearly 3 percent in the second quarter but are still 0.6 percent higher than at the same time last year. The median existing single-family home price in the South reached $238,500 in the second quarter, 4 percent higher than last year.