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More markets reached double-digit annual price gains in the first quarter of 2022 than the previous quarter, according to the latest quarterly report from the National Association of Realtors (NAR). The median single-family existing-home price increased 15.7% year over year (YOY) to $368,200, up from 14.3% YOY growth in the fourth quarter of 2021.

“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” says NAR chief economist Lawrence Yun. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”

Seventy percent of the 185 measured metros experienced double-digit price gains in the first quarter, up from 66% in the previous quarter. The South region made up 45% of single-family existing-home sales in the first quarter and recorded a double-digit price appreciation of 20.1% in the quarter. The Northeast experienced price appreciation of 6.7%, the Midwest saw prices increase 8.5%, and the West experienced price appreciation of 5.9%.

According to the NAR, the 10 areas with the highest YOY price gains were made up of midsize and small markets, with half of the metros (Punta Gorda, Ocala, Lakeland-Winter Have, Tampa-St. Petersburg-Clearwater, and North Point-Bradenton-Sarasota) located in Florida. Other markets with the highest YOY price gains include Ogden-Clearfield, Utah, Decatur, Alabama, Fort Collins, Colorado, Myrtle Beach-Conway-North Myrtle Beach, North Carolina/South Carolina, and Salt Lake City.

“Traditionally, homes in these markets were viewed as relatively inexpensive, but with recent migration trends, prices have increased significantly,” says Yun. “As more families relocate to various areas, we may see more surprising markets on our top 10 list. Price gains in many smaller, tertiary cities are now outpacing those in the more expensive primary and secondary markets. This is due to buyers looking for less expensive housing and also a result of more opportunities to work from home, making relocation to smaller markets possible.”

Half of the nation’s 10 most expensive markets were in California, including San Jose-Sunnyvale-Santa Clara ($1,875,000; 25% YOY growth), San Francisco-Oakland-Hayward ($1,380,000; 15% YOY growth), Anaheim-Santa Ana-Irvine ($1,260,000; 26% YOY growth), San Diego-Carlsbad ($905,000; 18.5% YOY growth), and Los Angeles-Long Beach-Glendale ($792,500; 13.1% YOY growth). The remaining five most expensive markets include urban Honolulu, Boulder, Colorado, Seattle, Naples-Immokalee-Marco Island, Florida, and Denver.

The NAR says with sustained price appreciation and higher mortgage rates, affordability “greatly worsened” in the first quarter of 2022. The monthly mortgage payment on a typical existing single-family home with a 20% down payment rose 30% on a YOY basis to $1,383. Families typically spent 18.7% of their income on mortgage payments in the first quarter, compared to 14.2% in the first quarter of 2021.

“Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers, as well,” says Yun.

During the first quarter, a home purchase was seen as unaffordable for a first-time buyer intending to purchase a typical home, according to the NAR. The mortgage payment on a 10% down payment loan on a typical starter home valued at $313,000 rose 30% YOY to $1,363. First-time buyers typically spent 28.4% of their family income on mortgage payments; a mortgage is considered unaffordable if the monthly payment amounts to over 25% of the family’s income.

According to the NAR, a family needed at least $100,000 to afford a 10% down payment in 27 markets, an increase from 20 markets in the fourth quarter of 2021. A family needed less than $50,000 to afford a home in just 63 markets, down from 81 markets in the previous quarter.