Home price growth accelerated across the country in the first quarter as demand picked up and home supply remained anemic, according to a quarterly report on home prices released by the National Association of Realtors.
“Sales could soften slightly in some of these markets seeing sharp price appreciation unless housing supply markedly improves and tempers its unhealthy level of growth,” said Lawrence Yun, chief economist at NAR, in a statement.
The number of metro areas that posted a double-digit annual increase in home prices more than doubled in the first quarter, up from 24 metro areas in the fourth quarter of 2014 to 51 metro areas in the first quarter of this year.
In the first quarter of 2014, 37 metro areas notched double-digit annual increases.
The median existing single-family home price rose in 85 percent of measured markets, with 148 out of 174 metro areas tracked by NAR climbing in the first quarter compared to the first quarter of 2014. That was largely unchanged compared to the fourth quarter of 2014.
“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,” Yun said. “However, stronger demand without increasing supply led to faster price growth in many markets.”