[ad_1]
Home prices across the U.S. had the highest quarter-to-quarter gain since 2015, as potential homebuyers are getting pushed out of an increasingly expensive market.
The median single-family home value rose 10.2% from the first to the second quarter of 2023 to $350,000, a report from real estate data firm ATTOM found. It’s the biggest quarterly increase in almost the past decade.
Median home prices in 565 of the 574 counties analyzed in the report (98%) were less affordable than in prior quarters, more than double the number of counties that were unaffordable two years ago before mortgage rates went up. This means only 2% of counties examined were more affordable than their historic averages.
Buyers Are Feeling the Pinch
It’s unclear if the increase in prices is temporary or signals another extended price surge, but “house hunters are feeling the pinch,” said Rob Barber, CEO of ATTOM.
“The U.S. housing market has done an about-face following a downturn that threatened to usher in an extended period of flat or falling prices,” he said. “With that has come another blow to how much house the average worker around the country can afford.”
Looking at data from publicly recorded sales deeds and average wage data from the U.S. Bureau of Labor Statistics, ATTOM found that affordability among homeowners worsened in the last quarter. The portion of income required to buy a home shot up to 33%, above common lending practices of a 28% debt-to-income ratio.
Still, wage growth has outpaced housing prices in 74% of the counties analyzed—a reversal of trends during the same quarter in 2022, when prices were growing faster than wages in 91% of counties.
Counties with the Highest Sales Growth
| County | Associated Market | Increase in Median Sales Price YoY |
|---|---|---|
| St. Louis County, Missouri | St. Louis | 19% |
| Broward County, Florida | Fort Lauderdale | 7% |
| Miami-Dade County, Florida | Miami | 7% |
| Fulton County, Georgia | Atlanta | 6% |
| Palm Beach County, Florida | West Palm Beach | 6% |
The report found that 91% of counties analyzed had seen an increase in housing prices. They rose at least 5% in two-thirds of markets, hitting a peak in nearly 40% of the counties examined.
Among the 47 counties with a population of at least 1 million, the biggest year-over-year increases in sales prices were in the South, with most counties located in Florida. A housing shortage and surge in population have caused prices to skyrocket in the Sunshine State.
The Bottom Line
While inflation and mortgage rates have steadied, there is still a bit of uncertainty around the U.S. economy. The Federal Reserve is also poised to raise interest rates in July, which could further increase housing prices. But if the stock market cools down and the economy falls into a recession, housing prices could drop.
The third quarter of 2023 will be key to knowing if the housing price boom is set to continue or will fade as it did during the same period last year. For now, though, real estate remains a seller’s market.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
[ad_2]
Source_link
