Home prices rose in the fourth quarter of 2014, especially in Western markets. See how your region of the country fared.
If you own a home, chances are good it’s worth more now than when you bought it. Home prices rose in 86% of metro areas in the fourth quarter of 2014, data from the NATIONAL ASSOCIATION OF REALTORS® show.
Prices increased steadily due to a shrinking supply of homes for sale and a growing number of homebuyers entering the market to take advantage of low mortgage interest rates, said NAR Chief Economist Lawrence Yun.
“Home prices in metro areas throughout the country continue to show solid price growth, up 25% over the past three years on average,” he said. “This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”
The five most expensive housing markets in the fourth quarter:
1. San Jose, Calif., $855,000
2. San Francisco, $742,900
3. Honolulu, $701,300
4. Anaheim-Santa Ana, Calif., $688,500
5. San Diego, $493,100
The five lowest-cost metro areas in the fourth quarter:
1. Youngstown-Warren-Boardman, Ohio, $78,000
2. Rockford, Ill., $86,800
3. Toledo, Ohio, $87,100
4. Decatur, Ill., $90,400
5. Cumberland, Md., $90,500
The national median existing single-family home price in the fourth quarter was $208,700, up 6.0% from the fourth quarter of 2013 ($196,900).
At the end of the fourth quarter, there were 1.85 million existing homes available for sale. That’s a 4.9-month supply given the pace at which homes are selling. A supply of six to seven months represents a healthy balance between buyers and sellers.
“Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas — particularly in the West — where the current supply of new and existing homes for sale is failing to keep pace with overall demand and growing populations,” said Yun. “Unless homebuilders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring.”
Condo and Co-op Prices
Nationally, condominium and cooperative prices (NAR measures those in 61 metro areas) reached $203,300 in the fourth quarter, up 3.3% from the fourth quarter of 2013 ($196,900).
Forty-six metro areas (75%) showed increases in their median condo price from a year ago; 14 areas had declines.
NAR President Chris Polychron said REALTORS® throughout the country are reporting slightly improved buyer demand compared with a year ago. “Interest rates below 4%, rising rents, and healthier local job markets are convincing more consumers to consider homeownership,” he said.
To measure affordability, NAR compares the median income ($65,782 nationally) and median home price ($208,700).