Inventory increased and metro market prices rose in the first quarter of 2019, but at a slower pace than the previous quarter, according to the latest quarterly report by the National Association of Realtors®. The national median existing single-family home price in the first quarter was $254,800, up 3.9% from the first quarter of 2018 ($245,300).
Single-family home prices increased in 86% of measured markets last quarter, with 153 of 178 metropolitan statistical areas1 showing sales price gains compared to the first quarter of a year ago. Thirteen metro areas (7%) experienced double-digit increases, down from 14 in 2018’s fourth quarter.
Lawrence Yun, NAR chief economist, says the first quarter has been beneficial to U.S. homeowners. “Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year,” he said.
Total existing-home sales2, including single family homes and condos, increased 1.2% to a seasonally adjusted annual rate of 5.207 million in the first quarter, up from 5.143 million in the fourth quarter of 2018. That is 5.4% lower than the 5.507 million-pace in the first quarter of 2018.
At the end of 2019’s first quarter, 1.68 million existing homes were available for sale3, 2.4% up from the 1.64 figure at the end of 2018’s first quarter. Average supply during the first quarter of 2019 was 3.8 months – up from 3.5 months in the first quarter of 2018.
National family median income rose to $77,7524 in the first quarter, while higher home prices caused overall affordability to decrease from last year. A buyer making a 5% down payment would need an income of $60,143 to purchase a single-family home at the national median price, while a 10% down payment would require an income of $56,978, and $50,647 would be necessary for a 20% down payment.
The five most expensive housing markets in the first quarter were the San Jose-Sunnyvale-Santa Clara, Calif., metro area, where the median existing single-family price was $1,220,000; San Francisco-Oakland-Hayward, Calif., $930,000; Anaheim-Santa Ana-Irvine, Calif., $800,000; Urban Honolulu, Hawaii $794,100; and San Diego-Carlsbad, Calif., $620,000.
“There are vast home price differences among metro markets,” Yun says. “The condition of extremely high home prices may not be sustainable in light of many alternative metro markets that are much more affordable. Therefore, a shift in job search and residential relocations into more affordable regions of the country is likely in the future.”
The five lowest-cost metro areas in the fourth quarter were Decatur, Ill., $80,800; Youngstown-Warren-Boardman, Ohio, $89,200; Elmira, N.Y., $90,400; Cumberland, Md., $99,300; and Binghamton, N.Y., $107,200.
Yun continues to call on the construction industry to develop more affordable housing units, which he says will combat slower price gains and buyer pullback. “More supply is needed to provide better homeownership opportunities, taming home price growth and widening the inventory choices for consumers. Housing Opportunity Zones could provide the necessary financial benefits for homebuilders to construct moderately priced-homes,” Yun said.
Total existing-home sales in the Northeast sat at an annual rate of 683,000 (down 1.4% from last quarter) and are down only 1.0% from a year ago. The median existing single-family home price in the Northeast was $277,200 in the first quarter, up 3.7% from a year ago.
In the Midwest, existing-home sales fell 4.0% in the first quarter and are 5.5% below a year ago. The median existing single-family home price in the Midwest sat at $194,100, a 3.9% increase from the first quarter of 2018.
Existing-home sales in the South increased 4.3% in the first quarter but were 4.0% lower than the first quarter of 2018. The median existing single-family home price in the South was $225,700 in the fourth quarter, 2.5% above a year ago.
In the West, existing-home sales in the first quarter grew by 2.8% and are 10.7% below a year ago. The median existing single-family home price in the West increased 3.5% year-over-year to $384,300.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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NOTE: NAR releases quarterly median single-family price data for approximately 175 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.
Data tables for MSA home prices (single family and condo) are posted at https://www.nar.realtor/research-and-statistics/housing-statistics/metro…. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.
1Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at: http://www.census.gov/population/estimates/metro-city/List4.txt(link is external).
Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.
Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.
NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.
Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.
2The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing.
3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).
Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.
4Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25% of gross income devoted to mortgage principal and interest at a mortgage interest rate of 3.9%.