Home Buyers in 92% of Metro Areas See Home Prices Rising in Q3
Home prices are continuing to become expensive in the most urban parts of the country. Home buyers in 92% of America’s biggest metro areas witnessed home prices rising during the third quarter of 2017, according to the latest report by the National Association of Realtors (NRA).
Median prices of single-family homes have jumped 5.3% in the third quarter of 2017, compared to the same quarter a year ago. The increase was recorded in 162 of the 177 metro areas covered by the NRA.
The chief economist at NRA owes the rise in prices to strength in the jobs market. But while it’s true that America’s jobs growth has been robust this year, wages are largely remaining stagnant.
The reality is that we’re seeing home prices rising in the big metropolitan areas where demand for housing is outpacing supply. A growing number of Americans are moving towards the urban metro areas for employment and better living opportunities.
Construction of new housing in these metro cities, meanwhile, hasn’t kept up pace with the growing population. The result is obvious: prices are shooting up.
As the NRA chief economist points out, “home prices still far exceed incomes in several parts of the country – especially in the largest markets in the South and West where new home construction simply is not keeping up with job growth.”
Home Prices Rising Most in Californian Metro Areas
The NRA finds that the state which ranks number one with the most expensive home prices is California. Four of the top five most expensive metro areas for home buyers are located in California, with the fifth being Honolulu, Hawaii.
The metro area with the most expensive single family homes in America is San Jose, California, where the median price of a single-family home has hit $1.16 million. Right behind is San Francisco, where a single-family home now costs an average $900,000.
Closely following them is the Anaheim-Santa Ana metro area in California with a median price of $790,000. Honolulu and San Diego take the fourth and fifth spot with average single-family home prices of $760,200 and $607,000, respectively.
The median price of a single-family home across the country is now $254,000. The NRA identifies that an average American looking to finance a house with a five percent down payment must be making at least $55,142 annually to afford buying one.
Rising home prices are a major concern for Americans who dream of owning their own home. Their affordability is not only suffering because of the prices getting expensive over time, but also because of rising mortgage rates. Needless to say, the dream of owning their own home is slipping away from their reach with each passing day.
“Metro Home Prices Maintain Fast Growth in Third Quarter; Rise 5.3 Percent,” National Association of Realtors, November 02, 2017.