Home prices show the largest year-over-year gain since 2006. Learn more about the latest housing market trends.
The median price for an existing, single-family home rose to $186,100 in the third quarter of the year, posting a 7.6 percent gain from $173,000 in the third quarter of 2011, the National Association of Realtors reported today. The gain is the largest year-over-year increase in existing home prices since the first quarter of 2006, and follows a 7.2 percent annual increase realized in the second quarter of 2012.
A shrinking supply of available homes for sale contributed to the gains, which were realized in 120 of the 149 metropolitan housing markets tracked by the association. “Housing inventories have been gradually trending down from a record set in the summer of 2007,” said Lawrence Yun, the association’s chief economist. “Earlier this year, a broad equilibrium began to develop in most areas between home buyers and sellers, which led to a sustained upturn in home prices.”
A smaller share of distressed home sales contributed to the price gains, according to the association. Foreclosures and short sales accounted for 23 percent of sales, down from 30 percent a year ago. As prices rose, so did the rate of existing home sales, which increased 3.2 percent in the third quarter of 2012, and 10.3 percent compared to the third quarter of 2011. A high level of affordability, due in part to record-low interest rates, helped boost sales.
Time on market is also declining, said Jed Smith, the association’s director of quantitative research, in a blog published today on the association’s website. The latest Realtors Confidence Index finds that 59 percent of houses sold in September had been on the market three months or less.
The number of improving housing markets grew by 22 to 125 in November, according to the First American Improving Markets Index reported today by the National Association of Home Builders. This marks the third consecutive month of improvement for the index, which tracks housing markets showing six consecutive months of gains in housing permits, employment and home prices.