According to the National Association of Realtors, homes prices are up in 93 percent of the country’s 176 major metro areas during the second quarter. Nineteen percent of those metros saw double-digit increases in the second quarter.
NAR Chief Economist Lawrence Yun said that, “Steady rent increases, the slow rise in mortgages rates, and stronger local job markets fueled demand throughout most of the country this spring. While this led to a boost in sales paces not seen since before the downturn, overall supply failed to keep up and pushed prices higher in the majority of metro areas.”
For renters considering homeownership, affordability is becoming a growing problem. Yun states that, “With home prices and rents continuing to rise and wages showing only modest growth, declining affordability remains a hurdle for renters considering homeownership – especially in higher priced markets.”
The national median price for a single-family home in the second quarter was $229,400 – an 8.2 percent increase year-to-year. Yun blames the growing inequality on the downward trend in the homeownership rate – “these equity gains are going to fewer households.”
The median household income in the U.S. rose slightly to $66,637 in the second quarter, but it would still take annual earnings of $49,195 to buy a home at the national median price with a 5 percent down payment; $46,605 for a 10 percent down payment; and $41,427 for a 20 percent down payment.
