More metro areas saw double-digit YOY increases in their median single-family existing-home sales price in Q1 2022 than in Q4 2021, according to the National Association of Realtors’ (NAR) quarterly report.
Prices grew by double-digits in 70% of the 185 metros analyzed by NAR, up from 66% in Q4 2021.
The median sales of single-family existing homes rose at a pace of 15.7% to $368,200, compared to 14.3% in the quarter prior.
Affordability dropped as a result, with monthly mortgage payments on the typical home with a 20% downpayment rising to $1,383, up $319 (30%) YOY. Homeowners spent 18.7% of their income on mortgage payments, up from 14.2% the same time last year.
The South region accounted for 45% of single-family existing home sales in Q1, with price appreciation of 20.1%. In the Northeast saw increases of 6.7%, the Midwest 8.5%, and the West 5.9%.
“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.”
Midsize and small markets saw the highest YOY price appreciation, with Punta Gorda, FL taking the top spot at 34.4%. Half of the most expensive markets were in California.
“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 added.
A first-time buyer purchasing a typical home is now seen as housing cost-burdened, spending 28.4% of their income on mortgage payments. A mortgage is considered unaffordable if the monthly payment amounts to more than 25% of a buyer’s income.
Affordability is a major concern for first-time buyers, who are struggling to compete with cash-rich investors and long-time homeowners flush with equity. California launched a new program this week intended to help with this problem, letting first-time buyers borrow a downpayment at a 0% interest rate.
“Owning a home represents belonging, stability and has long been recognized as one of the best ways to build wealth, but for far too many Californians the dream of homeownership remains just out of reach,” CA Business, Consumer Services, and Housing Agency Secretary Lourdes Castro Ramírez said.