The number of major U.S. markets reporting home price increases grew slightly in the third quarter even as the overall rate of appreciation continued to slow.
According to a report released Thursday by the National Association of Realtors (NAR), the median price for an existing single-family home rose annually last quarter in 73 percent of the 172 major metros surveyed. That share was up slightly from the second quarter, when 71 percent of metros posted year-over-year gains.
While the number of appreciating metros was up in Q3, the rate of growth was down in most areas. According to NAR, 16 markets last quarter had double-digit increases, down from 19 in Q2 and 54 last year.
"Home-price gains returned to more normalized levels of low- to mid-single digit rate of appreciation in many metro markets as inventory levels steadily increased," said Lawrence Yun, chief economist for the group. "Moreover, there are a good number of local markets that are still remarkably affordable with median prices at or under $200,000."
The association says the national median existing single-family home price in Q3 was $217,300, up 4.9 percent from last year.
Compared to last year, prices were up in all four of the country's major regions, though increases were mild all around. Gains were led by the Midwest, where the median price rose 5.0 percent annually to $172,700.
That was followed by increases of 4.9 percent in the West (to $302,300); 4.5 percent in the South (to $189,400); and 2.2 percent in the Northeast (to $261,700).
In other news, NAR estimated that total existing-home sales (including single-family and condo sales) were at a seasonally adjusted annual rate of 5.12 million in the third quarter, rising from 4.87 million in Q2 but well short of Q3 2013's pace of 5.32 million.
With the labor market improving, interest rates hovering at historical lows, and housing inventory seeing gains, the group expects demand—and home sales—to pick up in the coming year as the market continues to look more buyer-friendly.
"With inventory levels at a rate closer to supporting overall demand, bidding wars are occurring less—giving buyers more time to view homes and secure financing," said NAR President Steve Brown. "Additionally, Realtors across the country continue to report less investor activity and fewer all-cash sales in their markets compared to earlier in the year."