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The Home Price Eclipse

Home price, appreciation, houseDespite 2.2 million new jobs created in the last year and incredible interest in buying this spring, lack of listings caused price appreciation to continue its incline according to NAR Chief Economist Lawrence Yun. Not only did second quarter numbers continue their path, but they surpassed Q2 of 2016, Q3 of 2016, and now stand as the new peak quarterly median sales price.

"The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments,” Yun said in the 2017 Q2 report. “An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth building benefits of homeownership."

In 87 percent of markets, single-family home process increased—that’s 154 out of 178 metros showing increases from Q2 2016. Twenty-three of those metros experienced double digit increases, which is down from 30 metros in Q1.

Unfortunately, the increase in median family income ($71,529) didn’t align with the increase in mortgage rates and home prices. According to the report, in order to purchase a single-family home at the national median price, a homebuyer making a 5 percent down payment would have to make $56,169, a buyer making a 10 percent down payment would have to make $53,213, and a 20 percent down payment would require an income of $47,300.

"Mortgage rates have subsided in recent months, which has only somewhat helped take away some of the sting prospective buyers are experiencing with the deteriorating affordability conditions in many areas," said Yun. "Household incomes may be rising and giving consumers assurance that now is a good time to buy, but these severe inventory shortages will likely continue to be a drag on sales potential the second half of the year."

To read the full report, including a regional breakdown, click here.

About Author: Brianna Gilpin

Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation's leading diversified media and information services companies. To contact Gilpin, email [email protected].
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