Home prices surging across many US cities, says NAR - how homeowners can benefit

Home prices show double-digit increases across 78% of U.S. metros

Home prices surged in the third quarter, but could be slowing as demand eases.  (iStock)

Home prices are surging, rising across 99% of the 183 measured market areas in the third quarter, according to the latest quarterly report from the National Association of Realtors (NAR). In fact, about 78% of those markets saw double-digit price gains. That trend is slowing, though, giving much-needed relief to home buyers.

"Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter," NAR Chief Economist Lawrence Yun said. "I expect more homes to hit the market as early as next year, and that additional inventory, combined with higher mortgage rates, should markedly reduce the speed of price increases."

The number of areas that saw double-digit home price growth dipped from the second quarter, in which a whopping 94% saw such increases. But three metros saw annual home price increases of more than 30%, including Austin-Round Rock, Texas with 33.5%; Naples-Immokalee-Marco Island, Florida at 32%; and Boise City-Nampa, Idaho with 31.5%. 

If you've seen significant home price growth in the current housing market, consider taking out a cash-out refinancing to take funds out of your home and perhaps lower your interest rate. The current average interest rate for a 30-year mortgage rests near record lows at 3.1%, according to Freddie Mac data. Visit Credible to compare lenders and find your personalized interest rate.


Bidding wars begin to ease

Overall, the average median sales price of single-family existing homes increased 16% annually in the third quarter – rising to $363,700 – according to NAR’s report. This is a slower pace than the second quarter's 22.9%, and less home sales turned into bidding wars between those desperate to buy.

"While buyer bidding wars lessened in the third quarter compared to early 2021, consumers still faced stiff competition for homes located in the top ten markets," Yun said. "Most properties were only on the market for a few days before being listed as under contract."

Many of the most expensive markets were clustered in one particular state: California. The NAR report showed some of the markets with the highest median home prices were San Jose-Sunnyvale-Santa Clara at $1.65 million; San Francisco-Oakland-Hayward at $1.35 million; Anaheim-Santa Ana-Irvine at $1.1 million; and San Diego-Carlsbad at $850,000.

As home prices went up in the third quarter, the monthly mortgage payment as a share of the median family income increased to 16.6%, up from 14.9% last year. Homeowners can reduce their monthly payments by refinancing them into today’s low rates for a lower interest rate loan. Visit Credible to compare multiple mortgage lenders at once and choose the one that has the best rate for you.


How homeowners benefit from rising prices

The greatest benefactors of rising real estate prices are homeowners and home sellers, who are seeing record levels of equity. In fact, 39.5% of mortgaged residential properties in the current real estate market were considered equity rich in the third quarter. Homeowners owed no more than 50% of the home’s estimated market value, according to the third-quarter 2021 U.S. Home Equity and Underwater Report from ATTOM Data Solutions.

"Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow as soaring home prices pushed their equity levels ever higher," ATTOM Chief Product Officer Todd Teta said. "Amid the best gains in two years, nearly four of every 10 owners found themselves in equity-rich territory." 

"For sure, some uncertainty lies ahead as other key market barometers have been a bit shaky as of late," Teta said. "And the Coronavirus pandemic remains a threat. But there is no doubt that homeowners continue benefitting big-time from the relentless home price increases we are seeing around the country."

Although the rate of increase is slowing, the housing market remains highly competitive for homebuyers as affordability remains strained amid high demand. If you want to see how much the value of your home has increased and compare options for a cash-out refinance or see how much you could save with low mortgage rates, contact Credible to speak to a home loan expert and get all of your questions answered.

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