Home prices around the U.S. surged to new high this year
- Median prices for single-family homes and condos hit a record $266,000 this spring, up 6% from a year ago.
- One factor leading to higher prices -- low mortgage costs are luring more prospective buyers into the market.
- People who sold their homes last quarter saw an average price gain of $67,500 compared with their original purchase price.
With affordable homes already in short supply around the U.S., house-hunters this spring faced another challenge: surging prices. Median home prices in the second quarter surged to a record high $266,000 for single family-homes and condos, according to a recent report from property research firm ATTOM Data Solutions. That's up 6% from about $250,000 a year ago.
Prices often rise starting the spring as warmer weather brings out house-hunters. Another draw — a recent decline in mortgage costs, with the Federal Reserve widely expected to cut its benchmark interest rate later this month.
"It's no surprise that people were wanting to buy a home, even if prices were at their peak," Todd Teta, chief product officer at ATTOM Data Solutions, said in a statement. "We expect to see milder home prices in the coming quarters."
The record prices are only the latest reminder that even in a buyer's market, the cost of homes has for decades outpaced wage growth in the U.S., putting homeownership out of reach for many Americans. Only slightly more than half of Americans can afford a home priced 20% below the median price in their area, an analysis by John Burns Real Estate Consulting recently found.
The high prices make it difficult for prospective homeowners to save for a down payment or upgrade to a more expensive property. Median home prices have jumped 121% nationwide since 1960, while household income has only risen 29%, according to real estate platform Clever.
Good news for sellers
The high cost of homes at least paid off for homeowners who waited until the warmer months to sell their homes. According to the ATTOM report, Americans who sold their homes last quarter saw an average home price gain of about $67,500 from the purchase, a healthy 34% return on their original purchase price. That's up from $60,100 in the same period last year.
Some of the 149 metro areas ATTOM tracks awarded sellers even higher returns, including San Jose (85%) and San Francisco (72%) in California; Seattle in Washington (66%); Salem in Oregon (63%); and Salt Lake City in Utah (61%).
The research firm found that homeowners selling their residences also owned them on average for about eight years. By comparison, Americans typically owned their homes for just four years, or 4.2 years, in the decade leading up to the Great Recession.