WASHINGTON (February 8, 2024) – More than 85% (189 of 221) of metropolitan markets sold in the fourth quarter of 2023 as 30-year fixed mortgage rates decreased from 7.79% to 6.61%, according to financial institutions recorded an increase in house prices. National Association of REALTORS® Latest Quarterly Report. Of the 221 metro areas surveyed, 15% saw double-digit price increases over the same period, up from 11% in the third quarter.
“Homeowners have benefited from the accumulation of home equity, but many homebuyers have been shocked by the high cost of housing, and the typical The average monthly payment has increased from $1,000 three years ago to more than $2,000 last year.” “This doubling of housing costs for recent homebuyers is not included in official consumer price index inflation calculations, contributing to dissatisfaction with the economy.”
Compared to a year ago, the national median price for single-family existing homes rose 3.5% to $391,700. Last quarter, national median prices rose 2.2% year over year.
Among major U.S. regions, the South recorded the largest share (45%) of single-family existing home sales in the fourth quarter, with prices increasing 3.2% year over year. Prices rose 7.3% in the Northeast, 4.7% in the Midwest and 4.2% in the West.1
“Sales were suppressed because inventory was limited,” Yun said. “However, increased home construction and lower mortgage rates will not only improve housing affordability, but will also help bring more homes to market in 2024.”
The top 10 metro areas with the highest year-over-year median price increases, which can be influenced by the type of homes sold in the quarter, all posted increases of at least 14.8%. These include Dayton, Ohio (19.9%); Kingsport-Bristol-Bristol-Virginia, TN (19.2%); Fond du Lac, WI (18.6%); Trenton, NJ (17.3%); Salinas, CA (17.1%); Newark, NJ, PA state. (16.7%); Anniston-Oxford, Alabama (15.7%); Bloomington, Illinois (15.4%); Johnson City, Tennessee (15.2%). Anaheim – Santa Ana – Irvine, California (14.8%).
Eight of the top 10 most expensive markets in the United States are in California. Overall, those markets are San Jose-Sunnyvale-Santa Clara, California ($1,750,300, 11%); Anaheim-Santa Ana-Irvine, California ($1,299,500, 14.8%). San Francisco-Oakland-Hayward, California ($1,251,000, 4.3%); Honolulu, Hawaii metropolitan area ($1,069,400, -1.9%). Salinas, California ($993,900, 17.1%); San Diego-Carlsbad, California ($931,600, 8.7%); Oxnard Thousand Oaks Ventura, California ($916,800, 7.9%); San Luis Obispo-Paso Robles, California ($912,100, 5.7%); Los Angeles-Long Beach-Glendale, California ($884,400, 6.7%); and Boulder, Colorado ($849,400, 11.8%).
Less than one in five markets (14%, or 32 of 221) saw home prices decline in the fourth quarter, down from 17% in the third quarter.
Housing affordability improved slightly in the fourth quarter on the back of lower mortgage rates. The monthly mortgage payment for a typical existing single-family home with a 20% down payment was $2,163, down 1.2% from the third quarter ($2,189) but 10% compared to a year ago. ($196) increase. Households typically spend 26.1% of their income on mortgage payments, down from 26.7% in the previous quarter but up from 24.2% a year ago.
Inventory shortages and affordability continued to impact first-time buyers during the fourth quarter. For a typical starter home worth $332,900 with a 10% down payment loan, the monthly mortgage payment decreased slightly to $2,120, a 1.2% decrease from the previous quarter ($2,146). However, it was an increase of $190 (9.8%) compared to a year ago ($1,930). A first-time buyer typically spends 39.4% of his household income on mortgage payments, down from 40.3% last quarter.
In 47.1% of the market, families needed at least $100,000 in qualifying income to get a mortgage with a 10% down payment, up from 45.7% last quarter. However, in 2.3% of the market, families needed a qualifying income of less than $50,000 to purchase a home, down from 2.7% in the previous quarter.
About the National Association of REALTORS®
The National Association of REALTORS® is the nation's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered association membership mark that identifies real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics.
# # #
MSA housing prices (single-family homes and condos) data tables are available at https://www.nar.realtor/research-and-statistics/housing-statistics/metropolitan-median-area-prices-and-affordability . If insufficient data is reported for an MSA for a particular quarter, the data is listed as N/A. For areas not listed in the table, please contact your local REALTORS® association.
Note: NAR releases median single-family home price data for approximately 185 metropolitan statistical areas (MSAs) quarterly. In some cases, MSA prices may not match data published by state and local REALTOR® associations. Any discrepancies may be due to differences in geographic scope, product mix, or timing. If a discrepancy occurs, REALTORS® are advised that local data from the association may be more relevant for business purposes.
1 Areas are typically metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR follows OMB definitions, but in some areas exact match is not possible based on available data. A list of counties included in the MSA definition is available at https://www.census.gov/geographies/reference-files/time-series/demo/metro-micro/delineation-files.html.
Regional median home prices are from a separate sampling that includes parts of rural areas and some small metropolitan areas not included in this report. Changes in regional rates do not necessarily parallel changes in metropolitan areas. Due to seasonality in purchasing patterns, the only valid comparison of median prices is year-over-year comparisons. Quarterly comparisons do not correct for seasonal changes, especially the timing of family purchasing patterns.
Median price measurements reflect the types of homes sold during a quarter and can sometimes be distorted by changes in sales mix. For example, changes in the level of heavily discounted distressed sales can vary significantly in a given market and can impact percentage comparisons. Annual price measurements typically smooth out quarterly fluctuations.
NAR began tracking median single-family home prices in metropolitan areas in 1979. The metropolitan area condo price series dates back to 1989.
The seasonally adjusted annual percentage rate for a particular quarter represents the actual total sales for the year if that quarter's relative sales pace were maintained for four consecutive quarters. Total home sales include single-family homes, townhomes, condominiums, and cooperative housing.
