According to Realtors, an uptick in existing U.S. home sales in the final three months of 2017 pulled down housing inventory to an all-time low, while keeping home-price growth at its recent robust pace.
The national median existing single-family home price in the fourth quarter was $247,800, which is up 5.3 percent from the fourth quarter of 2016 ($235,400). The median price during last year’s third quarter climbed 5.6 percent from the third quarter of 2016.
Single-family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas showing sales price gains in the fourth quarter compared to a year ago. Twenty-six metro areas (15 percent) experienced double-digit increases (11 percent in the third quarter), and 18 metros eclipsed their previous peak sales price. Overall, home prices are now at their all-time high in 114 markets (64 percent).
Lawrence Yun, NAR chief economist, says 2017 capped off another year where home prices in most markets ascended at a steady clip amidst improving sales and worsening inventory conditions. “A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices,” he said. “Remarkably, home prices have risen a cumulative 48 percent since 2011, yet during this same timeframe, incomes are up only 15 percent. In the West region, where very healthy labor markets are driving demand, the gap is even wider.”
Added Yun, “These consistent, multi-year price gains have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation; however, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”
Total existing-home sales, including single family and condos, increased 4.3 percent to a seasonally adjusted annual rate of 5.62 million in the fourth quarter from 5.39 million in the third quarter, and are 1.3 percent higher than the 5.55 million pace during the fourth quarter of 2016.
At the end of the fourth quarter, there were 1.48 million existing homes available for sale, which was 10.3 percent below the 1.65 million homes for sale at the end of the fourth quarter in 2016. The average supply during the fourth quarter was 3.5 months – down from 4.2 months in the fourth quarter of last year.
(World Property Journal)