Inventory levels of homes for sale continued downward during the first quarter, sending national home prices to their strongest quarterly sales pace in 10 years, according to the latest quarterly update from the National Association of Realtors
The national median existing single-family home price in the first quarter was $232,100, which is up 6.9 percent from the first quarter of 2016 ($217,200) and the fastest growth since the second quarter of 2015 (8.2 percent).
The median price during the fourth quarter of 2016 increased 5.9 percent from the fourth quarter of 2015.
Single-family home prices increased in 85 percent of measured markets during the first three months of the year, with 152 out of 178 metro areas showing sales price gains in the first quarter compared with the first quarter of 2016. Twenty-five areas (14 percent) recorded lower median prices from a year earlier.
“Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” said Lawrence Yun, NAR chief economist.
Toughest competition was seen in the starter-home market where “those able to successfully buy most likely had to outbid others,” Yun said. This helped fuel price growth to the fastest quarterly pace in almost two years, he added.
Despite a rise in the national family median income ($71,201), the combination of higher mortgage rates and home prices slightly weakened affordability compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $52,251, a 10 percent down payment would require an income of $49,501, and $44,001 would be needed for a 20 percent down payment.