Realtors Top Economist Calls This ‘Astonishing’, Market briefs

In Washington, An “astonishing” thing happened in the U.S. housing market during the first quarter of this year, said the chief economist at the National Association of Realtors.

More than 90 percent of metro markets (205 out of 221, or 93 percent) posted home price increases, even as the 30-year fixed mortgage rate ranged from 6.60 to 6.94 percent, said Lawrence Yun, quoted in the NAR’s latest quarterly real estate report.

“Astonishingly, [that] home price growth [took place while] facing the highest mortgage rates in two decades,” he said. “In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”

And that situation may not improve soon. NAR measured the amount of new home construction and compared it to the number of newly employed workers in 146 metropolitan statistical areas to determine whether homebuilding has kept up with the steadily improving pace of job growth during the past three years. The findings show that construction activity for all housing types is underperforming in roughly two-thirds of measured metro areas.

The report shows the South recorded the largest share of single-family existing-home sales (46 percent) in the first quarter of 2024, reflecting year-over-year price appreciation of 3.3 percent. Prices also swelled 11 percent for homes in the Northeast, 7.4 percent in the Midwest and 7.3 percent in the West.

“The expensive markets in the West, where home prices declined last year, are roaring back,” Yun observed.

In many cases, the cost increases are not just nudges, he said. “Thirty percent of the 221 tracked metro areas (63 markets) experienced double-digit price gains over the same period, up from 15 percent in the fourth quarter of 2023.”

Compared to one year ago, the national median single-family existing-home price climbed five percent to $389,400. In the prior quarter, the year-over-year national median price increased 3.4 percent.

The 10 metro areas in the nation with the largest year-over-year median price increases, which Yun said can be influenced by the types of homes sold during the quarter, all registered price gains of at least 18.2 percent. Six of these markets are in Illinois and Wisconsin and eight of the top 10 most expensive markets are in California.