Home prices continued to grow in nearly every major metro across the country in the third quarter, according to the latest quarterly report from the National Association of Realtors.
The national median existing single-family home price rose to $254,000, a 5.3 percent increase from the median in Q3 2016 of $241,300.
“The stock market’s climb to new record highs, the continued stretch of outstanding job growth and mortgage rates under 4 percent kept homebuyer demand at a very robust level throughout the summer,” said Lawrence Yun, NAR’s chief economist.
Home prices in the third quarter increased in 92 percent of the 177 metropolitan statistical areas measured by NAR, which is the most since the second quarter of 2015 (93 percent). Only 15 areas recorded lower median prices from this time last year.
“While there was some moderation in price appreciation last quarter, home prices still far exceed incomes in several parts of the country – especially in the largest markets in the South and West where new home construction simply is not keeping up with job growth,” Yun said.
However, inventory remains tight across the country and the number of sales continue to fall. Total existing-home sales fell 3.1 percent from 5.56 million in Q2 2017 to a seasonally adjusted annual rate of 5.39 million in Q3 2017. That number is slightly up compared to the 5.38 million in Q3 2016.
There were 1.90 million existing homes for sale at the end of the third quarter, which is 6.4 percent less than Q3 2016’s level of 2.03 million existing homes available. The average supply was 4.2 months, which is down from 4.6 months last year.
“Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had out outbid others in order to close on a home,” Yun said. “The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”
In the South, existing home sales are down 4.4 percent from the last quarter, but 0.2 percent above last year’s level. The median home price in the area increased 5.5 percent year-over-year to $226,100.