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NAR: 99% of Metros Had First-Quarter Home Price Gains

About 1 out of 10 metros had double-digit home price gains. NAR economist: They’re happening in all markets, big and small, even metros long considered off-the-radar.

WASHINGTON – Nearly every metro area tracked by the National Association of Realtors® (NAR) – 99% – recorded year-over-year price increases in the first quarter of 2021, according to the association’s latest quarterly report.

The 11 metros with the highest price increases saw median sales prices range from the $100,000s to $600,000s, with most of those outside the metro areas that traditionally saw high demand. In five of the top metros, prices year-to-year rose over 30%. They include:

  • Kingston, N.Y. (up 35.5%; $303,100)
  • Bridgeport-Stamford-Norwalk, Conn. (34.3%; $580,400)
  • Atlantic City-Hammonton, N.J. (34.0%; $277,200)
  • Barnstable Town, Mass. (33.1%; $567,600)
  • Boise City-Nampa, Idaho (32.8%; $422,600)
  • Sherman-Denison, Texas (29.8%; $234,800)
  • Elmira, N.Y. (29.1%; $126,900)
  • Austin-Round Rock, Texas (28.2%; $437,900)
  • Youngstown-Warren-Boardman, Ohio-Pa. (27.7%; $119,500)
  • Decatur, Ill. (27.5%; $102,400)
  • Glens Falls, N.Y. (27.5%; $214,600)

Some of the median-home price changes, especially in small cities, were dependent on the type of homes sold during Q1 2021 – not all homes saw large appreciations in price.

“Significant price increases throughout the country simply illustrate strong demand and record-low housing supply,” says Lawrence Yun, NAR chief economist. “The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home seekers.”

The overwhelmingly majority of metros experienced strong price increases, with 89% (163 metro areas out of 183) registering double-digit price growth. For comparison, 25% of metro areas (46 out of 181) saw such growth in 2020’s first quarter when housing inventory was at a healthier level of 3.3 months, better matching the pace of monthly demand even though it was considered somewhat tight even then.

Although home sellers have benefited from sharp price jumps, the situation has presented challenges for buyers.

“The sudden price appreciation is impacting affordability, especially among first-time home buyers,” says Yun. “With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely.”

One Florida metro area – Immokalee-Marco Island – made NAR’s top 10 list for “most expensive markets” that continued to see double-digit price growth. Those Florida residents saw a median home price of $599,500, and a year-to-year increase of 24.9%.

Out of the other top 10 most expensive markets with notable price growth, five are in California, and one each in Hawaii, Colorado, Washington State and New York.

Nationally, the median existing-home sales price rose 16.2% year-over-year, reaching $319,200 – a record high since 1989. All of the four regions NAR tracks recorded double-digit year-over-year price growth, with the Northeast seeing a 22.1% increase, followed by the West (18.0%), South (15.0%) and Midwest (14.4%).

“These higher home prices underscore the importance of stepping up housing supply,” Yun says. “An increase of inventory – either by new construction or by converting abandoned and unused retails or hotels – would combat the affordability problem.”

As a result of soaring home prices, the average national monthly mortgage payment rose to $1,067, up from $995 one year ago.

In the first quarter, on average, families with a median income of $90,547 spent 14.1% of that income on mortgage payments with a 20% down payment and a 30-year fixed mortgage (14.5% one year ago). Mortgage payments are considered affordable if they amount to no more than 25% of the family’s income.

Nationally, a family typically needed an income of $51,216 to pay a 30-year fixed-rate mortgage with a 20% down payment ($47,760 one year ago). In 68% of the measured markets (125 of the 183 metro areas), a family needed less than $50,000 to afford a home.

© 2021 Florida Realtors®