Home prices continue to rise rapidly as homeowners see double-digit gains over the past year. The median sales price of single-family existing homes rose 16% in the third quarter, an increase of $50,300, according to the latest quarterly report from the National Association of REALTORS®. Three metros saw price gains of more than 30% compared to a year ago.
The median sales price of a single-family existing home rose to $363,700 in the third quarter, which does mark a slower pace in comparison to the prior quarter. Still, all four major regions of the U.S. posted double-digit year-over-year growth, led by the Northeast (17.5%), followed by the South (14.9%), Midwest (10.7%), and the West (10.3%), NAR reports.
“Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter,” says Lawrence Yun, NAR’s chief economist. “I expect more homes to hit the market as early as next year, and that additional inventory, combined with higher mortgage rates, should markedly reduce the speed of price increases.”
Still, buyers are not letting the higher prices scare them off. “While buyer bidding wars lessened in the third quarter compared to early 2021, consumers still faced stiff competition for homes located in the top ten markets,” Yun says. “Most properties were only on the market for a few days before being listed as under contract.”
Housing Markets With the Steepest Gains
The following metros saw the highest year-over-year home price gains in the third quarter, according to NAR:
- Austin-Round Rock, Texas: 33.5%
- Naples-Immokalee-Marco Island, Fla.: 32%
- Boise City-Nampa, Idaho: 31.5%
- Ocala, Fla.: 29.7%
- Punta Gorda, Fla.: 27.5%
- Salt Lake City, Utah: 26.2%
- Phoenix-Mesa-Scottsdale, Ariz.: 25.8%
- Sebastian-Vero Beach, Fla.: 25.7%
- Port St. Lucie, Fla.: 24.9%
- New York-Jersey City-White Plains, N.Y.-N.J.: 24.5%
Overall, the most expensive housing markets in the third quarter were:
- San Jose-Sunnyvale-Santa Clara, Calif.: $1.65 million
- San Francisco-Oakland-Hayward, Calif.: $1.35 million
- Anaheim-Santa Ana-Irvine, Calif.: $1.1 million
- Urban Honolulu, Hawaii: $1,047,800
- Los Angeles-Long Beach-Glendale, Calif.: $860,900
- San Diego-Carlsbad, Calif.: $850,000
- Boulder, Colo.: $769,400
- Seattle-Tacoma-Bellevue, Wash.: $708,400
- Bridgeport-Stamford-Norwalk, Conn.: $658,900
- Boston-Cambridge-Newton, Mass.-N.H.: $657,800
Mortgage Payments Rising
The average monthly mortgage payment on an existing single-family home—financed with a 20% down payment, 30-year fixed-rate loan--increased to $1,214, NAR reports. This marked an increase of $156 compared to a year ago. The higher home prices are prompting higher mortgage payments despite lower mortgage rates, which averaged 2.92% in the third quarter.
“For the third quarter—and for 2021 as a whole—home affordability declined for many potential buyers,” said Yun. “While the higher prices made it extremely difficult for typical families to afford a home, in some cases the historically-low mortgage rates helped offset the asking price.”
