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Home Prices Remain Strong
Thursday, August 13, 2015 6:45 AM

The National Association of Realtors disclosed that home prices in the second quarter rose in 163 out of 176 metro areas, continuing their upward trajectory as economists warn of looming affordability problems and a limited supply of homes for sale.

The median existing single-family home price rose to $229,400 in the second quarter, up 8.2 percent from a year earlier. That was a slightly faster rate of increase than the 7.1 percent price rise seen in the first quarter.

Housing Starts

Real-estate agents reported a hot selling season, dwindling home supply, the return of bidding wars in some cities, and trigger-happy buyers eager to get a home loan before a long-expected rise in mortgage rates. (See current and historic mortgage rates in the Charts and Graphs section of Cornerstone Research).

According to NAR, home prices rose the fastest in the stretch of cities extending up the east coast of Florida between Port St. Lucie and Titusville, with the median sales price in those areas rising about 20 percent from a year earlier. On the other hand, Cumberland, Maryland, the metro including Stamford, Connecticut, and Kingston, New York, were among the few cities showing price declines, NAR said.

Californian cities continued their reign atop the list of most-expensive markets, with San Jose commanding a median sales price of $980,000.

NAR said that the average supply of homes in the second quarter was 5.1 months, down from 5.5 months a year ago.

Keeping supply tight is a high number of owners who still owe more on their homes than they’re worth, along with a pace of home construction that’s still well below the rate in the early 2000s, before the boom. New construction homes tend to be at higher price points, exacerbating affordability issues for entry-level buyers.

Source:  The Wall Street Journal, 12 August 2015