Home prices continued to surge in the second quarter as housing shortages and high buyer demand continue to persist amid the pandemic.
The median sales price of single-family existing homes increased in 99% of the 183 metro areas tracked in the second quarter compared to a year ago. Ninety-four percent of the markets posted double-digit price increases, according to a new report released Thursday by the National Association of REALTORS®.
The median sales price of single-family existing homes climbed nearly 23% to $357,900. That marks a $66,800 jump from a year ago, according to NAR.
“Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year, but are unlikely to be repeated in 2022,” said Lawrence Yun, NAR chief economist. “There are signs of more supply reaching the market and some tapering of demand. The housing market looks to move from ‘super hot’ to ‘warm’ with markedly slower price gains.”
Housing Affordability Weakens
As home prices rise, the average home buyer’s monthly mortgage payment is rising too, despite historically low mortgage rates. The monthly mortgage payment on a typical existing single-family home increased to $1,215, an increase of $196 compared to a year ago. The monthly mortgage payment as a share of a median family’s income increased to 16.5% in the second quarter, up from 14% a year prior.
“Housing affordability for first-time buyers is weakening,” Yun said. “Unfortunately, the benefits of historically low interest rates are overwhelmed by home prices rising too fast, thereby requiring a higher income in order to become a homeowner.”
Housing supply will be critical to moderating the growth in housing costs and rising rents, Yun added.