The first quarter of 2020 saw home price growth in almost all U.S. metro areas as single-family home price median price shoot up year-over-year in 96 percent of the markets measured in Q1 of 2020, the latest report from NAR said.
The latest National Association of Realtors first-quarter report on Metro Media Area Prices and Affordability indicated a national median price on the existing single-family homes of $274,600 or a rise of 7.7 percent as compared to the first quarter of 2019.
One hundred and seventy-four out of 181 metropolitan statistical areas registered sales price growth as fas as median single-family home prices are concerned. That 96 percent share is an improvement from the 94 percent recorded in the fourth quarter of 2019.
The first-quarter price growths are indicative of the housing demand before the COVID-19 outbreak, yet home prices are still standing ground due to limited listings, NAR chief economist, Lawrence Yun said.
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The areas that saw a double-digit percentage increase for existing single-family homes median sales price include Topeka, KS (18.3); Boise City-Nampa, ID (18.1); Oshkosh-Neenah, WI (17.6); Fayetteville, NC (17.0); Spartanburg, SC (14.8); Eugene, OR (14.5); Colorado Springs, CO (14.4); Birmingham-Hoover, AL (14.0); and Panama City, FL (14.0).
The metro areas that were already considered the most expensive posted price gains as well in the first quarter of 2020. Some of them were in the West Region were the median sales price increase from a year before: San Jose, CA (10.7); San Francisco, CA (5.9); Anaheim, CA (9.4); San Diego, CA (8.1); Boulder, CO (3.1); Los Angeles, CA (8.1) and Seattle, WA (11.5).
As for the regions, the Northeast posted the biggest gain with 9.1 percent from one year before, while the Midwest, South, and West regions increased by 7.5 percent each. There are also metro areas with marginal year-over-year declines, including Bloomington, IL (-1.8; Shreveport-Bossier City, LA. (-2.1) and Bowling Green, KY. (-2.7).
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Limited supply is pushing these sale prices up, Yun said, along with the strong demand for housing. The rocketing home prices are not healthy, he added, so homebuilding activities need to step up as demand is expected to rise further, especially from those who are securely employed, given that mortgage rates are at their historic lows.
Home purchases in the first quarter are more affordable, thanks to lower mortgage rates: the 30-year fixed-rate average was at 3.57 percent, dropping from 4.62 percent a year ago. The average monthly payment on a mortgage with a 30-year fixed-rate and a 20 percent down payment was $995, which is lower compared to one year ago, which was $1,048.
According to the latest report from Freddie Mac, the 30-year fixed-rate mortgage has hit another record low, 3.15 percent as of May 28, 2020, breaking its previous record for the third time. The mortgage rates decline seen to have stirred the purchase demand rising to eight percent from a 35 percent year-over-year drop in mid-April, the report said.
The quarterly metro area median price data covers about 175 Metropolitan Statistical Areas. NAR's tracking of the median single-family home prices began in 1979, while monitoring of metro area condo prices began in 1989.
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