Median existing single-family home prices rose in more metropolitan areas in the second quarter compared to the first, but a lack of inventory in lower price ranges limited buyer choice, according to the latest quarterly report from the National Association of Realtors.
The median existing single-family home price rose in 110 of 147 metropolitan statistical areas based on closings in the second quarter compared to the year-ago quarter. That's up from 74 metros that showed price gains from the first quarter and up from 41 that showed price increases in the second quarter of 2011.
Three areas were unchanged and 34 had price declines in the latest report.
Lawrence Yun, NAR chief economist, said home prices are set to rise in more markets going forward.
“It’s most encouraging to see a growing number of metro areas with rising median prices, which is improving the equity position of existing homeowners," he said.
“Some of the improvement in prices is due to a smaller share of sales in low price ranges where inventory is tight.”
The national median existing single-family home price was $181,500 in the second quarter, up 7.3% from $169,100 in the second quarter of 2011. It marks the strongest yearly increase since the first quarter of 2006 when the median price rose 9.4%.
But even with the gain, the current price is 20.1% below the record set in 2006.
Distressed homes, including foreclosures and short sales, accounted for 26% of second quarter sales, down from 33% a year ago.
Foreclosure filings on U.S. properties declined 3% from June to July and declined 10% from year-ago levels, according to the latest RealtyTrac report.
Total existing-home sales, including single-family and condo, slipped 0.7% to a seasonally adjusted annual rate of 4.54 million in the second quarter from 4.57 million in the first quarter, but were 8.6% above the 4.18 million pace during the second quarter of 2011.
At the end of the second quarter, there were 2.39 million existing homes available for sale, 24.4% below the close of the second quarter of 2011.
Regionally, existing-home sales in the Northeast slipped 0.6% in the second quarter but are 10.6% above the second quarter of 2011 while the median existing single-family home declined 1.6% to $241,300 from a year ago.
In the Midwest, existing-home sales rose 1.3% and are 16.2% higher than a year ago. The median existing single-family home price in the Midwest rose 7.5% to $149,400 in the second quarter from the same quarter in 2011.
Existing-home sales in the South increased 1.3% in the second quarter and are 7.7% above the second quarter of 2011. The median existing single-family home price increased 7.4% to $163,200 from a year earlier.
With tight inventory, existing-home sales in the West fell 5.3% in the second quarter but are 3% higher than a year ago while the median home price jumped 13.4% to $234,000 from the year-ago period.
“Inventory is pretty tight in all prices ranges in most of the West except for the upper end, which accounts for the sharp price gain,” Yun said.
The housing market is improving in the midst of economic uncertainty, CoreLogic (CLGX) said in its August MarketPulse Report. The pulse report shows home prices, including distressed sales, rising 2.5% year-over-year in June and 1.3% over the previous month.