WASHINGTON – Aug. 13, 2015 – The nationwide inventory crunch has pushed up home prices year-over-year in 93 percent of the country's 176 major metro areas during the second quarter, according to the National Association of Realtors® (NAR). Nineteen percent of those metros saw double-digit increases in the second quarter, according to NAR's latest housing report.
"Steady rent increases, the slow rise in mortgage rates, and stronger local job markets fueled demand throughout most of the country this spring," says NAR Chief Economist Lawrence Yun. "While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in a majority of metro areas."
For renters considering homeownership, affordability is becoming a growing problem, Yun says.
"With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering home ownership – especially in higher-priced markets," Yun says.
The national median price for an existing single-family home in the second quarter was $229,400 – an 8.2 percent increase year-to-year.
"The ongoing rise in home values in recent years has greatly benefited homeowners by increasing their household wealth," says Yun. However, "inequality is growing in America."
Yun blames the growing inequality on the downward trend in the homeownership rate – "these equity gains are going to fewer households."
The median household income in the U.S. rose slightly to $66,637 in the second quarter, but it would still take annual earnings of $49,195 to buy a home at the national median price with a 5 percent downpayment; $46,605 for a 10 percent down payment; and $41,427 for a 20 percent down payment, according to NAR.
Source: National Association of Realtors
© 2015 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.