Median home prices continued to rise in the majority of metropolitan areas in the second quarter, with the national year-over-year price showing the strongest gain in more than seven years, according to the latest quarterly report by the National Association of Realtors (NAR).
The median existing single-family home price increased in 87 percent of measured markets, with 142 out of 163 metropolitan statistical areas (MSAs) showing gains based on closings in the second quarter compared with the second quarter of 2012. Fifty areas, or 31 percent, had double-digit gains; one was unchanged and 20 had price declines.
In the second quarter of last year, 75 percent of all available areas showed price gains from a year earlier, and only 14 percent of markets rose by double-digit amounts. Eight markets were added to the report in the latest quarter.
Lawrence Yun, NAR chief economist, said tight inventory is continuing to drive home prices up, but gains should slow with interest rates increasing.
“Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year in most of the country,” Yun said in a statement.
The national median existing single-family home price was $203,500 in the second quarter, up 12.2 percent from $181,300 in the second quarter of 2012, which is the strongest year-over-year increase since the fourth quarter of 2005 when it surged 13.6 percent. In the first quarter the median price rose 11.3 percent from a year earlier.
Some of the price growth was driven by a decline in the percentage of distressed sales, NAR said. Distressed homes – foreclosures and short sales generally sold at discount – accounted for 17 percent of second quarter sales, down from 26 percent a year ago.
Yun noted areas impacted by judicial foreclosure are seeing more modest price increases.
“In areas where foreclosed inventory still looms because distressed properties are mired in a slow process, lender and market uncertainty are holding back price growth,” he said in the statement. “This includes areas such as New York City, Hartford and some markets in New Jersey.”
At the end of the second quarter 2.19 million existing homes were available for sale, down 7.6 percent from the close of the second quarter of 2012, when 2.37 million homes were on the market. The average supply during the quarter was 5.1 months, compared with 6.4 months in the second quarter of 2012.
Total existing-home sales, including single-family and condo, rose 2.4 percent to a seasonally adjusted annual rate of 5.06 million in the second quarter from 4.94 million in the first quarter, and were 12.3 percent above the 4.51 million level during the second quarter of 2012. Sales were at the highest pace since the second quarter of 2007, when they hit 5.23 million.
In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $199,700 in the second quarter, up 12.2 percent from the second quarter of 2012. Fifty metros showed increases in their median condo price from a year ago and six areas had declines.
Regionally, existing-home sales in the Northeast were unchanged in the second quarter but are 9.1 percent above the second quarter of 2012. The median existing single-family home price in the Northeast was $257,900 in the second quarter, up 6.9 percent to from a year ago.
