California takes the cake for pricey home buying in the U.S., as the state with eight of the 10 most expensive markets in the country.
That’s according to a new report from the National Association of Realtors (NAR), which indicated that more than 90% of metro markets in the U.S. (205 out of 221, or 93%) posted home price gains in the first quarter of 2024, as the 30-year fixed mortgage rate ranged from 6.60% to 6.94%.
Nearly one-third (30%) of the 221 tracked metro areas experienced double-digit price gains over the same period, doubling since the fourth quarter of 2023.
“Astonishingly, greater than 90% of the country’s metro areas experienced home price growth despite facing the highest mortgage rates in two decades,” NAR Chief Economist Lawrence Yun pointed out. “In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
The top 10 most expensive markets in Q1 2024 were San Jose-Sunnyvale-Santa Clara, Calif., where the median sales price for a single-family home was $1,840,000, a 13.7% increase year over year. It was followed by 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 viewed as second-chance opportunities by many buyers.”
The national median single-family existing-home price climbed 5% year over year to $389,400. In the prior quarter, the year-over-year national median price had increased 3.4%.
Most homebuyers made their purchases in the South, which had the largest share (46%) of single-family existing-home sales in the first quarter. This was with year-over-year price appreciation of 3.3%, far lower than in the Northeast, where prices swelled 11%, the Midwest, 7.4%, and the West, at 7.3%.
The top 10 metro areas with the largest year-over-year median price increases all registered gains of at least 18.2%. Six were in Illinois and Wisconsin. From highest to lowest, these price gains were found in 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%).
Half as many markets (71%) 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.
