Strong demand caused home prices to accelerate in many metro areas in the U.S. during the first quarter of 2015, and the number of areas experiencing double-digit price appreciation doubled compared to the previous quarter.
In fact, the median single-family home price increased in 85 per cent of measured markets, with 148 out of 174 metropolitan areas showing gains based on closings in the first quarter compared with the first quarter of 2014. Only 14 per cent recorded lower median prices from a year earlier.
Fifty-one metro areas in the first quarter (29 per cent) experienced double-digit increases, a sharp rise from the 24 metro areas in the fourth quarter of 2014.
Thirty-seven metro areas (21 per cent) experienced double-digit increases in the first quarter of 2014.
The national median single-family home price in the first quarter was $205,200, up 7.4 pe rcent from the first quarter of 2014 when it was $191,100.
Lawrence Yun, NAR’s chief economist, said after moderating to healthier levels of growth at the end of 2014, prices picked up in several metro areas during the first quarter.
“Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market,” he added.
“However, stronger demand without increasing supply led to faster price growth in many markets.”
Yun also said that sales could soften slightly in some of these markets unless housing supply markedly improves and tempers its unhealthy level of growth.
The five most expensive housing markets in the first quarter were certain metro areas in California: San Jose, where the median existing single-family home price was $900,000; San Francisco, $748,300; Anaheim-Santa Ana, $685,700; and San Diego, $510,300. Honolulu, Hawaii came in at $699,300.
The five lowest-cost metro areas in the first quarter were Youngstown-Warren-Boardman, Ohio, where the median single-family home price was $64,300; Cumberland, Md., $71,600; Rockford, Ill., $78,600; Decatur, Ill., $82,200; and Toledo, Ohio, $83,800.
Yun added: “Because of some volatility in smaller markets, it's wise to look at the long-term trend for a direction on prices.”
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