The median income required to buy a typical home is over $88,000 — $40,000 more than before the pandemic

0

By Aarthi Swaminathan

Affordability has deteriorated as home prices and mortgage rates remain high, the National Association of Realtors says

According to a new report from the National Association of Realtors, growth in major city house prices slowed but did not stop in the third quarter.

The NAR, which surveyed single-family home prices in 185 US cities, found that prices have increased in nearly all metro areas.

“The median income required to buy a typical home has risen to $88,300 — nearly $40,000 more than before the pandemic began in 2019,” said Lawrence Yun, NAR’s chief economist, in one Explanation.

With a 20% down payment, the monthly mortgage payment for a typical existing single-family home was $1,840, up 50% from a year ago, the NAR added.

Out of 185 markets, 181 saw price increases in the third quarter, according to the NAR. And compared to a year ago, the national median price for an existing single-family home rose at a much slower pace, rising 8.6% to $398,500.

“The more expensive West Coast markets are likely to see some price declines after this rapid price increase, which is the result of many years of limited housing construction,” Yun said.

“The Midwest, with relatively affordable home prices, is likely to continue to see price gains as incomes and rents rise,” he added.

While home prices have risen across America, the pace of the increase has slowed: only 46% of metro areas saw double-digit annual price increases, compared to 80% last quarter, according to NAR.

Higher mortgage rates, particularly with 30-year rates above 7%, have hit buyers hard and demand for homes has plummeted.

Here are the most expensive markets in the US in the third quarter:

Rank  Metro area                       Year-over-year price growth  Median price of a single-family existing home 
1     San Jose-Sunnyvale-Santa Clara   2.3%                         $1.69 million 
2     San Francisco-Oakland-Hayward    -3.7%                        $1.3 million 
3     Anaheim-Santa Ana-Irvine         9.1%                         $1.2 million 
4     Urban Honolulu                   7.6%                         $1.13 million 
5     San Diego-Carlsbad               5.9%                         $900,000 
6     Los Angeles-Long Beach-Glendale  3.8%                         $893,200 
7     Boulder                          7.5%                         $826,900 
8     Naples-Immokalee-Marco Island    16.7%                        $746,600 
9     Seattle-Tacoma-Bellevue          4.6%                         $741,300 
10    Boston-Cambridge-Newton          6.2%                         $698,900 

Where are prices still rising quickly?

But price growth is still strong in Florida.

Overall, the South accounted for the largest share of existing single-family home sales at 44% and also saw the largest year-over-year price growth at 11.9% in the third quarter.

The Midwest saw the slowest growth at 6.6%, followed by the West at 7.4% and the Northeast at 8.2%.

Here are the top 10 metro areas with the biggest year-over-year price increases:

Rank  Metro area                              Year-over-year price growth 
1     North Port-Sarasota-Bradenton           23.8% 
2     Lakeland-Winter Haven                   21.2% 
3     Myrtle Beach-Conway-North Myrtle Beach  21.1% 
4     Panama City                             20.5% 
5     Deltona-Daytona Beach-Ormond Beach      19.6% 
6     Port St. Lucie                          19.4% 
7     Greenville-Anderson-Mauldin             18.9% 
8     Kingsport-Bristol-Bristol               18.8% 
9     Tampa-St. Petersburg-Clearwater         18.8% 
10    Ocala                                   18.8% 

Do you have thoughts about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]

-Aarthi Swaminathan

 

(ENDS) Dow Jones Newswires

11-12-22 1401ET

Copyright (c) 2022 Dow Jones & Company, Inc.

Share.

Comments are closed.