Home prices and home sales both showed strong annual growth during the third quarter, according to the latest report by the National Association of Realtors.
The national median existing single-family home price jumped 7.6 percent from a year ago, to $186,100 — the strongest year-over-year increase for any quarter since first-quarter 2006, when prices were up 9.4 percent from the previous year.
“We expect fairly normal appreciation patterns in 2013, but there is a risk of price acceleration if builders are unable to meet the needs of our growing population and household formation,” Yun said.
While NAR attributed some of the price gain to a reduction in the percentage of distressed home sales — only 23 percent of existing homes sold in second-quarter 2012, down 30 percent from a year previous — the trade group stated that “higher prices significantly reflect a market recovery.”
Housing affordability numbers also fared well for the housing market. With a third-quarter national median family income of $61,700, NAR calculated that with a 5 percent down payment, a household would need only $40,900 to afford a home at the third-quarter national median price, assuming a 4 percent mortgage interest rate and 25 percent of gross income devoted to mortgage principal and interest. That home affordability income threshold drops as the down payment percentage rises.