Prices for single-family homes climbed in 87% of U.S. cities in the second quarter as the national housing recovery accelerated amid competition for a limited number of properties on the market.
The median transaction price rose from a year earlier in 142 of 163 metropolitan areas measured, the National Association of Realtors said in a report today. A year earlier, 75% of regions had gains.
Values are increasing as homebuyers, encouraged by improving employment, compete for a tight supply of listed properties. At the end of the second quarter, 2.19 million previously owned homes were available for sale, 7.6% fewer than a year earlier, according to the Realtors group.
“There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report.
The median price for an existing single-family home was $203,500 nationally in the second quarter, up 12% from a year earlier. That was the biggest gain since the fourth quarter of 2005, according to the Realtors group.
Areas with tight supplies of homes for sale had the strongest price growth, including Atlanta, Las Vegas, San Francisco, Los Angeles and Sacramento, California, the Realtors association said.
The housing recovery is strengthening amid a drop in the unemployment rate, which fell to 7.4% in July from 7.6% the previous month, according to Labor Department data.
Rising borrowing costs, meanwhile, may hurt future demand. Mortgage rates for 30-year loans have climbed from a near-record low of 3.35% in early May, rising to 4.4% in the week ended today, according to McLean, Virginia-based Freddie Mac.
“Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year in most of the country,” Yun said.