Average prices for single-family homes in metros increased annually in 91% of markets in Q2 2019, according to the National Association of Realtors (NAR). [1]
The latest figures represents an increase from the 86% share from Q1 2019, and the median single-family home in Q2 2019 was $279,600—an annual increase of 4.3%.
Metros that saw a decline in single-family pricing included San Jose-Sunnyvale-Santa Clara, California (-5.3%), San Francisco-Oakland-Hayward, California (-1.9%), and Honolulu, Hawaii (-1.2%). Boise City-Nampa, Idaho; Abilene, Texas; Columbia, Missouri; Burlington-South Burlington, Vermont; and Atlantic City-Hammonton, New Jersey, all saw double-digit decreases.
“New home construction is greatly needed, however home construction fell in the first half of the year,” Lawrence Yun, NAR Chief Economist, said. “This leads to continuing tight inventory conditions, especially at more affordable price points. Home prices are mildly reaccelerating as a result.”
The NAR states that 93 out of the 178 metros studied showed price growth of 5% of better.
“Housing unaffordability will hinder sales irrespective of the local job market conditions,” Yun said. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”
San Jose-Sunnyvale-Santa Clara was the most expensive market, with the average price of a single-family home came in at $1.3 million. Fellow California market San Francisco-Oakland-Hayward has average home prices of $1.05 million.
According to the NAR, Decatur, Illinois, is the least expensive metro, with median home prices coming in at $97,500. Youngstown-Warren-Boardman, Ohio, was close behind at $107,400.
The report also found that although median incomes increased to an estimated $78,366, greater home price growth [2] led to an overall decline in affordability in Q2 2019.
A prospective buyer making a 5% down payment would need an income of $62,192 to purchase an average priced single-family home.
“The exceptionally low mortgage rates will help with housing affordability over the short run,” Yun said. “But if the low interest rates are due to weakening economic confidence, as reflected from a correction in the stock market, then the low rates will not help with job growth and will eventually hinder home buying and home construction.”