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The National Association of REALTORS® (NAR) reported that approximately 87% of U.S. metro markets registered home price gains in the third quarter of 2024, despite 30-year fixed mortgage rates ranging from 6.08% to 6.95%. Of the 226 metro areas tracked, seven percent recorded double-digit price increases, down from 13% in the previous quarter, according to NAR’s latest quarterly report.
NAR Chief Economist Lawrence Yun noted that home prices remain stable, with homeowners having accumulated an average of $147,000 in housing wealth over the past five years. Distressed property sales and mortgage defaults are at historic lows, suggesting minimal risk of a market crash.
The national median single-family existing-home price rose 3.1% year-over-year to $418,700, compared with a 4.9% increase in the prior quarter. Regional trends showed the South accounting for the largest share of single-family sales at 45.1%, with 0.8% price growth. Other regions reported year-over-year increases of 7.8% in the Northeast, 4.3% in the Midwest, and 1.8% in the West.
The report identified the top metro areas with the largest year-over-year price increases, all above 10.6%. The leading markets included Racine, Wis. (13.7%); Youngstown-Warren-Boardman, Ohio-Pa. (13.1%); Syracuse, N.Y. (13.0%); and four markets in Illinois, including Peoria (12.4%), Springfield (12.3%), Rockford (11.1%), and Decatur (10.9%). Other notable markets included Burlington-South Burlington, Vt. (11.7%), Shreveport-Bossier City, La. (11.5%), and Norwich-New London, Conn. (10.6%).
Among the most expensive metro areas, eight of the top ten were in California, including San Jose-Sunnyvale-Santa Clara ($1,900,000), Anaheim-Santa Ana-Irvine ($1,398,500), San Francisco-Oakland-Hayward ($1,309,000), San Diego-Carlsbad ($1,010,000), Salinas ($959,800), San Luis Obispo-Paso Robles ($949,800), Los Angeles-Long Beach-Glendale ($947,500), and Oxnard-Thousand Oaks-Ventura ($947,400). Other high-priced areas included Urban Honolulu, Hawaii ($1,138,000) and Boulder, Colo. ($832,200).
Nearly 13% of markets experienced price declines in the third quarter, slightly higher than the 10% reported in the prior quarter. Housing affordability showed signs of improvement as mortgage rates declined. For a typical existing single-family home with a 20% down payment, monthly payments fell to $2,137, down 5.5% from the previous quarter and 2.4% from one year ago. Families spent an average of 25.2% of their income on mortgage payments, compared with 26.9% in the prior quarter and 27.1% one year ago.
First-time buyers saw modest improvements in affordability. For a starter home priced at $355,900 with a 10% down payment, the monthly payment decreased to $2,097, down 5.5% from the prior quarter. First-time buyers typically spent 38% of their family income on mortgage payments, down from 40.6% previously.
The qualifying income required to purchase a home with a 10% down payment dropped below $100,000 in 42.5% of markets, down from 48% in the previous quarter. Only 2.2% of markets allowed families earning under $50,000 to afford a home, slightly lower than the prior quarter’s 2.7%.
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