The National Association of Realtors® reported last week that the national median existing single-family home price in the second quarter was $255,600, representing a 6.2% improvement from $240,700 in the second quarter of 2016. The recent quarter also surpasses the third quarter of 2016 which was $241,300. The second quarter’s results reflect the median price trend for the first quarter of 2017, which showed an increase of 6.9% from the first quarter of 2016.
The figures support the unabated buyer demand colliding with inventory shortages nationwide.
The National Association of Realtors® reported that single-family home prices in the second quarter of 2017 increased in 87% of the markets tracked, with 154 out of 178 metropolitan statistical areas showing sales price gains. The market momentum was sustained due also to improvements in the job markets, low unemployment and a rise in household income. The report cites that, “The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season.”
There are many potential buyers who remain ready to make a purchase, especially as the mortgage rates have either stayed the same or dropped slightly. According to one report published by the Mortgage Bankers Association, mortgage rates have dropped to their lowest levels since the election.
Total existing-home sales fell by 0.9% to a seasonally adjusted annual rate of 5.57 million in the second quarter from 5.62 million in the first quarter of 2017. Nonetheless, sales remain 1.6% higher than the 5.48 million pace during the second quarter of 2016.
Inventory Squeeze
In the second quarter, the 1.96 million existing homes available for sale was 7.1% below the 2.11 million homes for sale at the end of the second quarter in 2016, putting the average supply for the second quarter at 4.2 months, which is lower than the 4.6 months reported in the second quarter of 2016.