In the second quarter, 199 out of 223 metro markets—or 90%—recorded home price gains on an annual basis, according to the National Association of Realtors (NAR).
Thirteen percent of the 223 analyzed markets experienced double-digit price gains over the same period, down from 30% in the first quarter. The national median single-family existing-home price rose 4.9% from a year ago to $422,100 in the second quarter.
“The record-high home prices in most metro markets bring good and bad news,” says NAR chief economist Lawrence Yun. “It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just years ago.”
Among the major census regions, the South registered the largest share of single-family existing-home sales (45.5%) in the second quarter, with a year-over-year price appreciation of 2.3%. Prices increased 9.8% in the Northeast, 5.5% in the Midwest, and 5.4% in the West.
The top 10 metro areas with the largest year-over-year median price increases all posted gains of at least 14.1%, led by Racine, Wisconsin (+19.8%); Glens Falls, New York (+19.8%); and El Paso, Texas (+19.2%). Five of the 10 metros with the largest median price gains were in the Northeast.
Seven of the top 10 most expensive markets in the nation were in California: San Jose-Sunnyvale-Santa Clara ($2,008,000); San Francisco-Oakland-Hayward ($1,449,000); Anaheim-Santa Ana-Irvine ($1,437,500); San Diego-Carlsbad ($1,050,000); Salinas ($1,035,700); Oxnard-Thousand Oaks-Ventura ($927,900); and San Luis Obispo-Paso Robles ($895,300). The median single-family existing price in the San Jose metro marks the first time since the NAR began tracking single-family home prices in 1979 that a metro area’s median price exceeded $2 million.
Just 10% of markets experienced home price declines in the second quarter, up from 7% in the first quarter.
“Previously fast-gaining markets took a breather in the past quarter, including Nashville, Tennessee; Durham, North Carolina; Austin, Texas; and several Florida metro areas,” Yun says. “Conversely, some markets that experienced declines last year have roared back, such as San Francisco, Anaheim, and New York.”
The increase of mortgage rates in the second quarter had a negative impact on housing affordability. The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,262, up 11.1% from the first quarter and up 10.3% from the second quarter of 2023. For a typical starter home valued at $358,800 with a 10% down payment loan, the monthly mortgage payment jumped to $2,218, up 10.3% from a year ago.
Families typically spent 26.5% of their income on mortgage payments in the second quarter, up from 24.2% in the previous quarter and 25.3% a year ago. First-time buyers typically spent 40% of their family income on mortgage payments in the second quarter, up from 36.5% in the prior quarter.
A family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in 48% of markets, up from 40.7% in the first quarter.
“Housing affordability will improve in upcoming months,” says Yun. “Mortgage rates have fallen measurably, and more supply is reaching the market. Therefore, the income required to buy a home will decrease.”
