The vast majority of metropolitan areas continued to experience strong year-over-year price growth in the fourth quarter, the latest quarterly report by the National Association of Realtors revealed.
However, a companion metro area annual affordability report pictures less favorable conditions, especially in the West.
The median existing single-family home price rose in 73% of measured markets, with 119 out of 164 metropolitan statistical areas recording gains based on closings in the fourth quarter compared with the fourth quarter of 2012.
In addition, forty-two areas, 26%, had double-digit increases, two were unchanged and 43 recorded lower median prices.
There are two ways of looking at the price gains, Lawrence Yun, NAR chief economist, said.
“The vast majority of homeowners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending,” Yun said.
“At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability,” he added.
On Monday, HousingWire reported on Yun's remarks at the alabama Commercial Real Estate Conference after he noted that it feels like America is still in a recession.
“Looking at the economy, last year was overall a sub-par performance with 2% GDP. That is below the historical norm of 3% and it’s been several years of under 3% growth,” he added.
“Direction wise I see the economy is expanding. I expect 2.5% GDP growth this year. In the 4th quarter growth was solid but that was one quarter. We need that rate to be consistent for four quarters,” Yun said.