Home Sale Prices Rose YoY in 181 Out of 185 Markets

Apartment rents might finally be falling, but single-family homes sales aren’t – at least not when measured year-over-year.

A report by the National Association of Realtors (NAR) last week showed that single-family existing-home sales prices grew in nearly every measured metro area – 181 of 185 – in the third quarter.

Compared to a year ago, the national median single-family existing-home price rose 8.6% to $398,500. The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $1,840 – up 50% year-over-year, Redfin reported.

Less than half of metro markets (46%) posted double-digit annual price appreciation (80% in the previous quarter), NAR added.

The national median single-family existing-home price climbed 8.6% from a year ago to $398,500. Year-over-year price appreciation decelerated when compared to the previous quarter’s 14.2%.

South Sees Largest Share of Home Sales

NAR Chief Economist Lawrence Yun said in prepared remarks, “Much lower buying capacity has slowed home price growth and the trend will continue until mortgage rates stop rising.”

The median income needed to buy a typical home has risen to $88,300 – that’s almost $40,000 more than it was prior to the start of the pandemic, back in 2019, according to NAR.

The South registered the largest share of single-family existing-home sales (44%) by region and the greatest year-over-year price appreciation (11.9%) in the third quarter. Prices elevated 8.2% in the Northeast, 7.4% in the West, and 6.6% in the Midwest.

A family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in 59 markets, up from 53 in the prior quarter. Yet, a family needed a qualifying income of less than $50,000 to afford a home in 17 markets, down from 23 in the previous quarter.

Some Facing a Tripling of Prices

Cesar Pina, real estate investor and developer, Flipping NJ, tells GlobeSt.com, that the increase of home prices is simply due to a house shortage.

“With high demand and little supply, the foreclosure market being at a standstill and rent being at an all-time high, we’re seeing the value of homes rise in every market,” Pina said.

“We got spoiled with low interest rates during the pandemic. Sellers who have locked in low interest rates are reluctant to sell because if they do, they’re faced with their next purchase being tripled. The real estate market’s inventory is not the same as it was two years ago.

“Most of us are on the sidelines right now waiting to see what happens next. The market is bottlenecking and until we can address these factors, we won’t see a change in prices. In this market, you have two choices right now, buy high or rent high.”

Arizona Homes’ Prices Fall 40% Since May

Tiffany Topie, real estate agent, Tiffany Topie Homes, tells GlobeSt.com that although several metro areas are seeing home prices continuing to rise, the Phoenix metro area has seen an average $40,000 decrease since the peak in May 2022.

“In May, a house listed at $510,000 is not dropping to approximately $470,000,” Topie said. “However, this does not signal a housing crash in my opinion because inventory is nowhere near its normal national level of pre-pandemic average.

“The millennial demand is still driving the market and mortgage rates are still low compared to previous decades. Homeowners around the country are still seeing an average of $120,000 equity.”

NY Metro Price Spike Mirrors National Figure

John D. Turpin, president and broker of record, Turpin Realtors/Forbes Global Properties, tells GlobeSt.com that, as part of the NY Metro Area, his market includes the cities, towns and countryside 20 to 40 miles west of Manhattan.

The average sale price for homes closed in October was 8.7% higher than October 2021 (median was 12.6% higher), Turpin said.

“Despite economic headwinds, we continue to see strong buyer interest,” he said. “Options remain limited with standing inventory currently at about 1/3 of pre-pandemic levels, and pricing remains firm. We are even seeing multiple bids on homes priced in the $1 million to $2.5 million range in desirable areas such as Harding Township.”

While in Connecticut

Richard Higgins, COO and associate broker, The Higgins Group/Forbes Global Properties, tells GlobeSt.com, “Owners in Fairfield County, Conn., are starting to settle down with their price increases at this time mainly because of the market heading into the winter months, which usually comes with even less buyer demand during this time and with the fear of what the market will look like in general in the near term.

“The only scenario I have seen recently when it comes to home price increases is those properties that came back to the active market in the past month or two after taking a breather, and now want to test the waters one last time at that number they would be ecstatic to receive.

“When I do see that, however, I wonder how serious they are about really selling. I am still optimistic that the markets won’t be as doom and gloom as many people are saying. I know a lot of people who are still excited about selling and buying in spring, at least for now.”