It is getting a lot more difficult for Americans to afford owning a home in many areas across the country. Historic low rates are not much help to home buyers because rapidly rising home values have caused affordability to decline in the second quarter compared to a year ago.

The National Association of Realtors (NAR) reported this week that the median existing single-family home price had went up in 83% of the housing markets the NAR studies in the second quarter compared with the second quarter of 2015. 16% of the markets recorded lower median prices from a year earlier.

The national average price for an existing single-family home was $240,700, an increase of 4.9% from the second quarter of 2015 ($229,400), which was previously the peak quarterly median sales price.

To purchase a home or condo in the current market with a 5% down payment, home buyers would need an annual income of $52,255, a 10% down payment would require an income of $49,504, and $44,004 would be needed for a 20% down payment.

Total existing single family home and condo sales were up 3.8% to a seasonally adjusted annual rate of 5.50 million in the second quarter from 5.30 million in the first quarter of this year, and are 4.2% higher than the 5.28 million pace during the second quarter of 2015, according to the NAR.

The five most expensive housing markets were the San Jose, California, metro area, where the median existing single-family price was $1,085,000; San Francisco, $885,600; Anaheim-Santa Ana, California, $742,200; urban Honolulu, $725,200; and San Diego, $589,900.

The five lowest-cost metro areas were Youngstown-Warren-Boardman, Ohio, $85,400; Cumberland, Maryland, $94,900; Decatur, Illinois, $95,600; Binghamton, New York, $105,500; and Rockford, Illinois, $109,000.

Here is the regional breakdown from the NAR

Northeast home sales climbed 7.6% in the second quarter and are 11.3% higher than this same time last year. The median existing single-family home price in the Northeast was 1.6% higher than the second quarter 2015 for an average price of $273,600.

Home sales jumped 10.4% in the Midwest, and are 6.6% higher than a year ago. The median price was up 5.1% to $191,300 in the second quarter from the same quarter a year ago.

In the South, home sales were 0.3 percent higher in the second quarter and are up 4.2% than the second quarter of 2015. The median home price in the South was $214,900 in the second quarter, 5.9% above a year earlier.

The West saw home sales go up 1.4%, but are 2.2% below a year ago. The median home price jumped 6.5% to $346,500 in the second quarter from the second quarter of 2015.

Lawrence Yun, NAR chief economist, issued this statement about the latest survey:

“Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities,” he said. “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.”

“Many listings in a majority of markets – and especially those in lower price ranges – had multiple offers and went under contract quickly because of severely inadequate supply,” added Yun. “This in turn dented affordability and without a doubt priced out a segment of buyers attempting to seek relief from fast-growing rents.”

Erik Sandstrom
LoanSafe's Mortgage Expert

I’m a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.