Metro markets are experiencing record-high home prices, particularly in the Northeast, which saw a 10.3% yearly increase. The Midwest, West, and South followed with gains of 5.2%, 4.1%, and 1.3% respectively. While 11% of tracked metro areas reported double-digit price increases, the South saw a drop in price growth, despite representing 45% of home sales. Overall, home prices have risen sharply due to underproduction and low homeownership rates. Though affordability slightly improved, the monthly mortgage remains a significant burden for buyers, particularly impacting first-timers.
Among all metro areas tracked, 11% recorded double-digit price increases, down from 14% in the previous quarter. And in the largest metro areas, the biggest annualized gains occurred in Syracuse, New York (+17.9%); Montgomery, Alabama (+16.1%); and Youngstown, Ohio (+13.6%).
Despite accounting for nearly 45% of the nation's existing-home sales, the South lagged in price growth and saw sales decline.
Yun noted that some previously declining markets including Boise, Idaho; Las Vegas; Salt Lake City; San Francisco; and Seattle have started to rebound.
Very expensive home prices partly reflect multiple years of home underproduction in those metro markets, Yun said. Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution.
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