Home prices rose almost everywhere in the US this summer
MIAMI - In case you needed more evidence of how much home prices have skyrocketed: Even as the housing market was cooling over the summer, prices still rose in 98% of US markets, according to a new report.
From July through September, home prices increased in 181 out of 185 cities tracked by the National Association of Realtors. But the gains had slowed substantially as mortgage rates rose during that time. About half of cities (46%) saw double-digit increases from the year before, down from 80% of cities in the prior quarter.
"Much lower buying capacity has slowed home price growth and the trend will continue until mortgage rates stop rising," said Lawrence Yun, NAR's chief economist.
Yun said that because of strong price growth and rising mortgage rates, the median income needed to buy a typical home rose to $88,300 in the third quarter. That's almost $40,000 more than it was prior to the start of the pandemic.
The average mortgage rate for a 30-year fixed-rate loan during the third quarter -- from July to September -- was lower than it is now, ranging between 4.99% and 6.70%, according to Freddie Mac. Rates are currently hovering above 7% and expected to go up further as the Federal Reserve continues to take action to rein in inflation.
Where prices rose the most
Prices grew in all parts of the country during the third quarter, but were up the most in the South, rising 11.9% in the third quarter from the year before, according to the report. Prices were up 8.2% in the Northeast, 7.4% in the West, and 6.6% in the Midwest.
Seven of the 10 cities with the biggest year-over-year price jumps were in Florida.
Sarasota, Florida, saw the biggest price jump in the third quarter, up 23.8% from a year earlier. It was followed by the Lakeland and Winter Haven area of Florida, up 21.2% from last year; Myrtle Beach, South Carolina, up by 21.1%; Panama City, Florida, up by 20.5%; and Daytona Beach, Florida, up by 19.6%.
The most expensive markets to buy a home were largely in the West, with half of the top 10 priciest cities in California.
San Jose, California, was the most expensive place to buy a home in the third quarter with the median price hitting $1,688,000, which was up 2.3% from a year before. It was followed by San Francisco, with a median price of $1,300,000; Anaheim, California, at $1,200,000; Honolulu, at $1,127,400; and San Diego, at $900,000.
"The more expensive markets on the West Coast will likely experience some price declines following this rapid price appreciation, which is the result of many years of limited home building," Yun said. "The Midwest, with relatively affordable home prices, will likely continue to see price gains."
