Home prices rose across the country during the first quarter, due in large part to increased buyer interest in tertiary markets, where price gains outpaced those in primary and secondary markets, the National Association of REALTORS® reported.
“Traditionally, homes in these markets were viewed as relatively inexpensive, but with recent migration trends, prices have increased significantly,” NAR chief economist Lawrence Yun said in a press release. “As more families relocate to various areas, we may see some surprising markets on our top 10 list.”
All of the top 10 areas with the highest year-over-year price gains in the quarter were midsize and small markets, and of those, five were in Florida. The top five metros and their gains were Punta Gorda, Florida (34.4%); Ocala, Florida (33.8%); Ogden-Clearfield, Utah (30.8%); Lakeland-Winter Haven, Florida (30.1%); and Decatur, Alabama. (28.9%).
Seventy percent of the 185 metros surveyed by NAR saw double-digit price gains in the first quarter, compared to 66% in the preceding period.
The median sales price for a single-family home in Seattle rose 14.2% year over year to $746,200 in the first quarter, compared to the national average of a 15.7% rise to $368,200, the National Association of REALTORS® reported. The pace of price gains a year ago was 14.3%.
“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” said Lawrence Yun, NAR chief economist. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”
Yun expects increased supply to continue to soften price increases going forward. Rising mortgage rates will take a heavier toll on affordability, which “greatly worsened” during the quarter, NAR said. The monthly mortgage payment on a typical single-family existing home rose $319, or 30%, from a year ago to $1,383.
“Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers as well,” Yun said.