NAR: Q1 brings home price gains in virtually every market

by Liz Hughes

The first quarter of 2021 brought home price gains in virtually every market, according to the National Association of Realtors. 

Ninety-nine percent of metro areas nationwide recorded year-over-year price increases in the first quarter of 2021, according to the National Association of Realtors latest quarterly report

The most expensive markets continued to experience double-digit growth in the first quarter, including Seattle-Tacoma-Bellevue, Wash., where the median price increased 17.9% to $653,400.

The report found median-home price changes in smaller cities were dependent on the types of home sold in the first quarter, as not all homes had large price appreciations. .

“Significant price increases throughout the country simply illustrate strong demand and record-low housing supply,” NAR Chief Economist Lawrence Yun said in a press release. “The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home seekers.”

Eighty-nine percent of cities registered double-digit growth, and while sellers continue to benefit from the uptick in prices, buyers are facing challenges, as inventory levels continue to remain low. 

“The sudden price appreciation is impacting affordability, especially among first-time home buyers,” Yun said. “With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely.”

Median existing home prices rose 16.2% year-over-year to $319,200, a record high since 1989, according to the report. All regions of the country saw double-digit year-over-year growth. The Northeast had a 22.1% increase, the West an 18% increase, the Midwest rose 14.4%, and the South had a 15% gain. 

The report also found the average monthly mortgage payment rose to $1,067 from $995 one year ago. On average, families with a median income of $90,547 spent 14.1% of that income on mortgage payments in the first quarter, with a 20% down payment and a 30-year fixed mortgage.

A family needed an income of $51,216 to pay a 30-year fixed-rate mortgage with a 20% down payment, according to the report. In 68% of markets measured, a family needed less than $50,000 to afford a home.

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