The median price of an existing single-family home in the 175 metros that NAR tracks climbed to $ 269,000, up 5.3 percent year-over-year. The staggering price tag is the highest since the organization began tracking the data in 1979.
“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’s 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.”
Existing home sales in the nation’s metros decreased 1.7 percent from last quarter and 2.4 percent year-over-year to a seasonally adjusted rate of 5.41 million. At the end of the second quarter, the number of existing homes available was up 0.5 percent year-over-year to 1.95 million.
“Solid economic growth, a healthy labor market and the large millennial population should be driving home sales much higher,” said Yun. “As long as economic conditions maintain current levels, there’s still a chance for sales to break out this year. However, with mortgage rates trending higher, it will only happen if supply levels improve enough to cool the speedy price growth in a majority of the country.”
Despite that solid economic growth – and a rise in the national family median income to $ 75,106 – affordability still dipped, according to the report, due to higher mortgage rates and home prices. A prospective buyer would need an income of $ 64,239 to afford a single-family home at the median price with a 5 percent down payment.
“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.”
San Francisco joined San Jose as cities where the median single-family home price climbed over $ 1 million in the second quarter of 2018. The other top metros in the country for single-family homes were Anaheim, where the median price was $ 830,000; Honolulu, where the median single-family home was $ 795,200; and San Diego-Carlsbad, where the median single-family home was $ 645,000.
The least expensive metros were Youngstown, Ohio; Cumberland, Maryland; Decatur, Illinois; Elmira, New York; and Erie, Pennsylvania.