{"id":22391,"date":"2023-06-27T12:25:36","date_gmt":"2023-06-27T12:25:36","guid":{"rendered":"https:\/\/www.anthonydidonato.net\/wordpress\/?p=22391"},"modified":"2023-06-27T12:25:37","modified_gmt":"2023-06-27T12:25:37","slug":"slowdown-in-home-prices-ahead-despite-growth","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/slowdown-in-home-prices-ahead-despite-growth\/","title":{"rendered":"Slowdown in Home Prices Ahead Despite Growth"},"content":{"rendered":"\n

The third quarter may have marked the end of price surges as higher mortgage rates put a damper on projections for property appreciation. Read more from NAR\u2019s latest report.<\/p>\n\n\n\n

Home prices continued to climb in the third quarter of this year, but the upward trend may finally be coming to an end, according to the National Association of REALTORS\u00ae\u2019 latest quarterly report<\/a>. Higher mortgage rates are starting to weigh on home price growth, though practically every major metro saw home prices rise in the third quarter. Forty-six percent of the 185 markets that NAR tracks even registered double-digit increases.<\/p>\n\n\n\n

The national median price for a single-family existing home was $398,000 in the third quarter, an 8.6% jump from a year earlier. That\u2019s a slower pace than in the second quarter, when the median price was 14.2% higher year over year. More easing is expected over the next few months, says NAR Chief Economist Lawrence Yun. \u201cMuch lower buyer capacity has slowed home price growth, and the trend will continue until mortgage rates stop rising,\u201d he says. \u201cThe median income needed to buy a typical home has risen to $88,300. That\u2019s almost $40,000 more than it was prior to the start of the pandemic.\u201d<\/p>\n\n\n\n

Meanwhile, the monthly mortgage payment on a typical existing single-family home with a 20% down payment swelled to $1,840 in the third quarter, up 50% year over year. The 30-year fixed-rate mortgage is currently above 7%\u2014double what it was a year ago\u2014prompting house hunters to revisit what they can afford. The typical family now needs a qualifying income of at least $100,000 to afford a 10% down payment on a mortgage in 59 markets, up from 53 markets in the second quarter. Further, a family with a qualifying income of less than $50,000 can afford a home in just 17 of the markets NAR tracks, down from 23 in the previous quarter.<\/p>\n\n\n\n

First-time home buyers are struggling<\/a> with these dynamics. A typical starter home worth about $338,700 would have a monthly mortgage payment of $1,808 with a 10% down payment, an increase of nearly $600 compared to a year ago. First-time buyers typically spend nearly 38% of their income on mortgage payments; most financial experts consider households financially burdened when they spend more than 25% of their income on housing.<\/p>\n\n\n\n

Where Prices Are Rising the Most<\/h2>\n\n\n\n

Some of the priciest markets in the country, like the San Jose and San Francisco areas in California\u2014with a median home price of $1.7 million and $1.3 million, respectively\u2014could see some cooling in the months ahead. \u201cThe more expensive markets on the West Coast will likely experience some price declines following this rapid price appreciation, which is the result of many years of limited homebuilding,\u201d Yun says. \u201cThe Midwest, with relatively affordable home prices, will likely continue to see price gains as incomes and rents both rise.\u201d<\/p>\n\n\n\n

The South not only saw the highest share of sales of existing single-family homes in the third quarter but also the highest year-over-year appreciation in the country, NAR\u2019s report shows. Prices jumped 11.9% in the region, followed by an 8.2% increase in the Northeast, 7.4% in the West and 6.6% in the Midwest.<\/p>\n\n\n\n

The following 10 metros posted the largest year-over-year price increases in the country in the third quarter:<\/p>\n\n\n\n