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Single-family existing-home sales prices increased in 86% of measured metro areas (189 of 221) in the fourth quarter of 2023, up from 82% in the previous quarter. The national median single-family existing-home price climbed 3.5% from the fourth quarter of 2022 to $391,700, according to the National Association of Realtors’ (NAR) latest quarterly report.

Of the 221`tracked metros, 15% experienced double-digit price gains over the same period, up from 11% in the third quarter. Increasing 10% from the fourth quarter of 2022 but down 1.2% from the third quarter of 2023, the monthly mortgage payment on a typical, existing single-family home with a 20% down payment was $2,163.

“Homeowners have benefited from housing wealth accumulation. However, many home buyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year,” says NAR chief economist Lawrence Yun. “This doubling in housing costs for recent home buyers is not included in the official consumer price index inflation calculations and contributes to the sense of dissatisfaction about the economy.”

Among the major U.S. regions, the South posted the largest share of single-family existing-home sales (45%) in the fourth quarter, with year-over-year price appreciation of 3.2%. Prices climbed 7.3% in the Northeast, 4.7% in the Midwest, and 4.2% in the West. Only 14% of metros experienced home price declines in the fourth quarter, down from 17% in the third quarter.

“Sales were restrained due to limited inventory,” Yun says. “But increased home building, along with lower mortgage rates, will not only improve housing affordability but also help bring more homes onto the market in 2024.”

The top 10 metro areas with the largest year-over-year median price increases, which can be influenced by the types of homes sold during the quarter, all recorded gains of at least 14.8%. Those include Dayton, Ohio (19.9%); Kingsport-Bristol-Bristol, Tennessee-Virginia (19.2%); Fond du Lac, Wisconsin (18.6%); Trenton, New Jersey (17.3%); Salinas, California (17.1%); Newark, New Jersey-Pennsylvania (16.7%); Anniston-Oxford, Alabama (15.7%); Bloomington, Illinois (15.4%); Johnson City, Tennessee (15.2%); and Anaheim-Santa Ana-Irvine, California (14.8%).

Eight of the top 10 most expensive markets in the United States were in California. Those markets are San Jose-Sunnyvale-Santa Clara ($1,750,300; 11%); Anaheim-Santa Ana-Irvine ($1,299,500; 14.8%); San Francisco-Oakland-Hayward ($1,251,000; 4.3%); Urban Honolulu, Hawaii ($1,069,400; -1.9%); Salinas ($993,900; 17.1%); San Diego-Carlsbad ($931,600; 8.7%); Oxnard-Thousand Oaks-Ventura ($916,800; 7.9%); San Luis Obispo-Paso Robles ($912,100; 5.7%); Los Angeles-Long Beach-Glendale ($884,400; 6.7%); and Boulder, Colorado ($849,400; 11.8%).

During the fourth quarter, lack of inventory and affordability continued to impact first-time buyers. For a typical starter home valued at $332,900 with a 10% down payment loan, the monthly mortgage payment fell slightly to $2,120, down 1.2% from the prior quarter ($2,146) but an increase of 9.8% from fourth quarter of 2022 ($1,930). Down from 40.3% in the third quarter of 2023, first-time buyers typically spent 39.4% of their family income on mortgage payments.

Up from 45.7% in the third quarter of 2023, a family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in 47.1% of markets, while a family needed a qualifying income of less than $50,000 to afford a home in 2.3% of markets, down from 2.7% in the third quarter of 2023.

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