Home price gains reached the double digits in 70% of the 185 measured real estate markets in 2022's first quarter, according to the latest quarterly report from the National Association of Realtors (NAR).
That number is up from 66% in 2021's fourth quarter, according to the organization. The increase also comes as the median sales price of single-family existing homes grew at a faster pace nationally — 15.7% in the first quarter compared with 14.3% the previous quarter, bringing the median home sales price to $368,200.
"Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022," NAR Chief Economist Lawrence Yun said. "Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months."
As home prices rise, mortgage rates are also increasing, which Yun believes could create less housing demand in the coming months.
"I expect more pullback in housing demand as mortgage rates take a heavier toll on affordability," he said. "There are no indications that rates will ease anytime soon."
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NAR data shows home prices going up in traditionally inexpensive markets
Home prices increased in markets across the United States, even in markets that are traditionally considered inexpensive.
"Traditionally, homes in these markets were viewed as relatively inexpensive, but with recent migration trends, prices have increased significantly," Yun said. "As more families relocate to various areas, we may see some surprising markets on our top 10 list.
"Price gains in many smaller, tertiary cities are now outpacing those in the more expensive primary and secondary markets," he continued. "This is due to buyers looking for less expensive housing and also a result of more opportunities to work from home, making relocation to smaller markets possible."
The top markets with the highest year-over-year price gains included:
- Punta Gorda, Florida (34.4%)
- Ocala, Florida (33.8%)
- Ogden-Clearfield, Utah (30.8%)
- Lakeland-Winter Haven, Florida (30.1%)
- Decatur, Alabama (28.9%)
Affordability worsened during the first quarter as the typical existing single-family home’s monthly payment after a 20% down payment rose to $1,383 per month, an increase of $319 from a year before. If you are interested in reducing your mortgage payments or taking cash out of your home, you could consider a cash-out refinance. Visit Credible to compare multiple mortgage lenders at once to find the best mortgage rate for you.
First-time homebuyers struggle amid rising prices
According to CoreLogic’s Home Price Index report, home prices rose a new record-high 20.9% annually in March. Yun said that such increases are hitting first-time homebuyers especially hard.
"Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers, as well," Yun said.
The NAR report also showed that a family needed at least $100,000 in order to afford a 10% down payment in the 27 most-expensive markets. But despite this struggle, home price gains could ease in the year ahead. CoreLogic’s forecast shows a home price decline is unlikely in the near future, but that home price gains are projected to slow to about 6% annually by March 2023.
If you are interested in purchasing a home or pulling cash out of your current home, consider a mortgage refinance. Contact Credible to speak to a home loan expert and get all of your questions answered.
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