The upward pressure on home prices may be lessening, but fewer places in the U.S. were able to escape double-digit annual price growth in recent months.
Single-family homes saw a double-digit annual rise in sale prices in 148 of 185 metro markets in the second quarter of 2022, according to the National Association of Realtors’ latest report. That’s 80 percent of markets that hit the double digits, up from 70 percent in the first three months of the year.
But while the effects of double-digit price growth were felt broadly throughout most of the country, the overall numbers did point to a housing market in the opening stages of a cooldown.
Half of homes sold for at least $413,500 from April through June, an increase of 14.2 percent compared to the same period last year. That’s down slightly from 15.4 percent year-over-year growth from the previous quarter.
“Overall, the national price deceleration inevitably followed the softening sales, providing well-positioned prospective buyers a small measure of welcomed relief,” NAR Chief Economist Lawrence Yun said in the report. “The recent dips in mortgage rates will bring additional buyers to market, especially in those places where home prices are still relatively affordable and where jobs are being added.”
Despite the slight slowdown in price growth, home affordability continued to erode faster than ever as mortgage rates shot up.
For buyers who financed a purchase with 20 percent down, homes were nearly a third more expensive to buy in the second quarter than they were in the opening months of the year.
These changes were beginning to push the bounds of what lenders traditionally consider an affordable home payment. The typical monthly mortgage payment in the second quarter of the year rose to 24.3 percent, up from 18.7 percent during the previous three-month period.
Some of the markets that were able to sustain the highest levels of price growth from April through June were places with robust hiring activity, Yun observed.
“The local job market performance and supply availability are the clear distinguishing factors driving local home price growth,” Yun added. “Job growth is positive and should be applauded, but supply restraints are creating unnecessary barriers to ownership opportunities.”
Florida markets posted particularly hot price increases over the past year, more than 25 percent in the greater Tampa, Sarasota and Fort Myers areas, among others.
The greater Fayetteville market in Arkansas led the nation with a 32 percent price growth year over year. Other markets with at least 25 percent price growth include South Carolina’s Myrtle Beach and Utah’s Ogden area.