“The national median price of single-family homes posted its strongest annual growth in nearly eight years in the third quarter of 2013, rising to $207,300, according to data from the NATIONAL ASSOCIATION OF REALTORS. That’s up 12.5% from $184,300 during the same period in 2012. The national median existing-condo price was $205,400 in the third quarter, up 15.1% from the third quarter of 2012.
The median existing single-family home price rose in 88% of the 163 metro markets NAR tracks, and in 54 of those markets prices rose by double digits.
“Rising prices and higher interest rates have taken a bite out of housing affordability,” said NAR Chief Economist Lawrence Yun. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”
A Look at Home Affordability
Even with the erosion in affordability, NAR data show in most markets, buyers with median income can still afford to buy a median-priced home, although that’s less so in pricier areas.
The five most-expensive housing markets were:
•San Jose, Calif., $805,000
•San Francisco, $705,000
•Anaheim-Santa Ana, Calif., $670,700
•San Diego, $485,000
Distressed Home Sales Down
One important factor in home prices, the proportion of distressed sales, also showed improvement. Distressed homes — foreclosures (http://www.houselogic.com/guide/foreclosure-faq/) and short sales (http://www.houselogic.com/home-advice/facing-foreclosure/foreclosure-alternative-short-sale/) generally sold at discount — accounted for 14% of third-quarter sales, down from 24% a year ago.
At the end of the third quarter, 2.21 million existing homes were on the market. At the current sales pace, it would take five months to sell them all. That’s down from a 5.9-month supply at the end of the third quarter of 2012.
Mortgage Rates Up
Since most home purchases involve a mortgage (http://www.houselogic.com/home-taxes-financing/home-loans-mortgages/), interest rates have a big influence on home sales. The national commitment rate on a 30-year conventional, fixed-rate mortgage averaged 4.44% in the third quarter, up from 3.69% percent in the second quarter, according to Freddie Mac.
Looking ahead, NAR President Gary Thomas said consumers need to be able to get safe, affordable mortgages in 2014. “NAR firmly believes that hardworking, creditworthy consumers should be able to achieve their dreams of owning a home,” he said. “As legislators and regulators consider reforms to the secondary mortgage market, they must ensure that mortgage capital is available under all economic conditions so that qualified homebuyers have access to safe, affordable loan products.’ ”