Over 90% of metro markets (205 out of 221, or 93%) saw home price gains in the first quarter of 2024, while the 30-year fixed mortgage rate ranged from 6.60% to 6.94%, according to the latest quarterly report from the National Association of Realtors® (NAR). Thirty percent of the 221 tracked metro areas experienced double-digit price increases during the same period, up from 15% in the fourth quarter of 2023.

"Remarkably, more than 90% of the nation's metro areas saw home price growth despite facing the highest mortgage rates in two decades," said NAR Chief Economist Lawrence Yun. "In the current market, rising prices are a direct result of insufficient housing supply not meeting full demand."

Compared to one year ago, the national median single-family existing-home price rose 5% to $389,400. In the prior quarter, the year-over-year national median price increase was 3.4%.

Among the major U.S. regions, the South registered the largest share of single-family existing-home sales (46%) in the first quarter, with year-over-year price appreciation of 3.3%. Prices also surged 11% in the Northeast, 7.4% in the Midwest, and 7.3% in the West.

The top 10 metro areas with the largest year-over-year median price increases, which can be influenced by the types of homes sold during the quarter, all registered gains of at least 18.2%. Six of these markets were in Illinois and Wisconsin. Overall, those markets were Fond du Lac, Wis. (23.7%); Kankakee, Ill. (22.0%); Rockford, Ill. (20.1%); Champaign-Urbana, Ill. (20.0%); Johnson City, Tenn. (19.3%); Racine, Wis. (19.0%); Newark, N.J.-Pa. (18.8%); Bloomington, Ill. (18.5%); New York-Jersey City-White Plains, N.Y.-N.J. (18.4%); and Cumberland, Md.-W.Va. (18.2%).

Eight of the top 10 most expensive markets in the U.S. were in California. Overall, those markets were San Jose-Sunnyvale-Santa Clara, Calif. ($1,840,000; 13.7%); Anaheim-Santa Ana-Irvine, Calif. ($1,365,000; 14.2%); San Francisco-Oakland-Hayward, Calif. ($1,300,000; 14%); Urban Honolulu, Hawaii ($1,085,800; 5.5%); San Diego-Carlsbad, Calif. ($981,000; 11.5%); San Luis Obispo-Paso Robles, Calif. ($909,300; 7%); Oxnard-Thousand Oaks-Ventura, Calif. ($908,700; 7.6%); Salinas, Calif. ($899,200; 4.1%); Naples-Immokalee-Marco Island, Fla. ($850,000; 9.4%); and Los Angeles-Long Beach-Glendale, Calif. ($823,000; 10.2%).

"The expensive markets in the West, where home prices declined last year, are roaring back," Yun said. "Price dips in that region were seen as second-chance opportunities by many buyers."

Seven percent of markets (15 of 221) experienced home price declines in the first quarter, down from 14% in the fourth quarter of 2023.

Housing affordability improved in the first quarter as mortgage rates declined. The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,037, down 5.7% from the fourth quarter of 2023 ($2,161) but up 9.3% – or $173 – from one year ago. Families typically spent 24.2% of their income on mortgage payments, down from 26.1% in the prior quarter but up from 23.3% one year ago.

Once again, first-time buyers faced limited inventory and elevated home prices in the first quarter, though affordability conditions improved from the previous quarter. For a typical starter home valued at $331,000 with a 10% down payment loan, the monthly mortgage payment fell slightly to $1,998, down 5.7% from the previous quarter ($2,118). However, that was an increase of $168, or 9.2%, from one year ago ($1,830). First-time buyers typically spent 36.5% of their family income on mortgage payments, down from 39.3% in the prior quarter.

A family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in 40.7% of markets, down from 47.1% in the previous quarter. Yet, a family needed a qualifying income of less than $50,000 to afford a home in 4.5% of markets, up from 2.3% in the prior quarter.

Source: floridarealtors.org