A new quarterly report from the National Association of Realtors revealed that median single-family home prices rose year over year in 96% of its measured markets in the second quarter. The national median existing single-family home price in Q2 was $291,300 — up 4.2% year over year.
“Home prices have held up well, largely due to the combination of very strong demand for housing and a limited supply of homes for sale,” said Lawrence Yun, NAR’s chief economist. “Historically low inventory continues to reinforce and even increase prices in some areas.”
There were 15 metro areas that saw double-digit price growth, NAR said, including Huntsville, Alabama, 13.5%; Memphis, Tennessee, 13.4%; Boise, Idaho, 12.6%; Spokane-Spokane Valley, Washington, 11.8%; Indianapolis, 10.8%; and Phoenix, 10.2%.
Yun said he doesn’t see home prices decreasing anytime soon, as low mortgage rates are attracting new buyers while there is record-low inventory. In Q2, 1.57 million existing homes were available for sale, 18.2% lower than total inventory at the end of Q2 2019.
“Unless an increasing number of new homes are constructed, some buyers could miss out on the opportunity to purchase a home or have the opportunity delayed,” Yun said. “In the meantime, prices show no sign of decreasing.”
San Jose, California, remained the most expensive metro in the country in the second quarter, showing year-over-year price gains of 3.8% to a median of $1.38 million. Nearby San Francisco was the second-most expensive metro in the quarter, with a median at $1.05 million.
“This last quarter showed heavy buyer activity in less occupied areas when compared to highly populated cities such as San Francisco, New York, and Washington, D.C., related in part to the longer shutdowns in these cities,” said Yun. “In the midst of the pandemic, some buyers are looking for housing in less crowded and more affordable metros.”
Some metros saw median home prices below $200,000, including Topeka, Kansas, at $147,800 and Springfield, Illinois, at $153,800.
Additionally, in 130 of the 181 metro areas, families making a downpayment of 20% would need less than $50,000 to be able to afford a home during Q2. However, in some metros 20% down would be much higher: in San Jose-Sunnyvale, California that would be $233,828; San Francisco would be $177,913; Anaheim, California at $145,550; and San Diego at $113,525.