The Scotsman Guide - Victor Whitman - 3 Nov 2015
Home prices rose in most U.S. cities in the third quarter as the market continues to see widespread shortages of inventories for sale, the National Association of Realtors (NAR) reported.
Prices were up in 87 percent of the 178 measured metropolitan markets, NAR said. Seven out of the nation’s 10 most expensive markets were located in the West region. Topping the list was San Jose, which had a median home price of $1 million for the second consecutive quarter, NAR reported.
The other top five cities included San Francisco, $835,400; Honolulu, $745,300; Anaheim-Santa Ana, California, $740,100; and San Diego, $589,300.
NAR said that tight inventories are the primary reason why home prices are rising. There were 2.04 million existing homes for sale at the end of September, down 6.8 percent from the same time a year ago.
The national median price for a home stood at $240,900 in the quarter, which is at a current peak and up 5.2 percent from the third quarter of 2015, NAR said.
So far, however, the rising prices haven't hurt the relative affordability of homes.
Lawrence Yun, NAR’s chief economist, said that the low mortgage rates and uptick in wages has actually improved the average affordability of homes compared to last year, but buyers increasingly face a challenging market, particularly in the South and West regions.
"If mortgage rates start to rise heading into next year, prospective buyers could face weakening affordability conditions in their market unless supply dramatically improves," Yun said. "That's why it's absolutely imperative that homebuilders ramp up the production of more single-family homes to meet demand and slow price growth."