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Home price appreciation accelerated across much of the country in the fourth quarter of last year, according to a quarterly update from the National Association of Realtors released Thursday.
The price for single-family homes rose in 86 percent of the 221 metropolitan areas tracked by NAR. The median price rose 3.5 percent from a year earlier, to $391,700.
The gains marked an acceleration in price growth compared to earlier in 2023, when median prices rose 2.2 percent, and grew in 82 percent of metro areas.
“Homeowners have benefited from housing wealth accumulation,” NAR Chief Economist Lawrence Yun said in a statement. “However, many homebuyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year,” “This doubling in housing costs for recent home buyers is not included in the official consumer price index inflation calculations and contributes to the sense of dissatisfaction about the economy.”
The rise in prices came as the 30-year fixed mortgage rate fell from an October high of 7.79 percent to 6.61 percent. It was also fueled in part by a lack of inventory, constraining supply amid high demand for homes.
The typical monthly payment for a mortgage on a single-family home rose to $2,163, 10 percent higher than a year earlier but down 1.2 percent from the third quarter, when mortgage rates were climbing toward post-pandemic highs.
The fall of housing affordability is particularly acute for first-time homebuyers, who spent 39.4 percent of their family income on mortgage payments. Households are considered cost-burdened if they spend more than 30 percent of their monthly income on housing, according to the U.S. Department of Housing and Urban Development.
In nearly half of the markets — 47.1 percent — buyers needed $100,000 to afford a 10 percent down payment.
Home prices fell in 14 percent of the 221 markets tracked by NAR.
“Sales were restrained due to limited inventory,” Yun said. “But increased homebuilding, along with lower mortgage rates, will not only improve housing affordability but also help bring more homes onto the market in 2024.”
The figures largely track other reports that show home price appreciation accelerated toward the end of the year. The S&P CoreLogic Case-Schiller Index reported last week that home prices increased 5.1 percent between November 2022 and November 2023, a pick-up from the previous month which saw annual growth of 4.7 percent.
