Rising mortgage rates pressure buyers to move quickly

Home prices rose by double-digit percentages in two-thirds of the largest US cities at the end of last year, but that was a slowdown from earlier in 2021.

Of 183 metro areas tracked, 67% saw double-digit growth in median home prices during the fourth quarter, down from 78% in the prior quarter and 94% the quarter before, according to a report from the National Association of Realtors.
The median price of a home was $361,700 in the fourth quarter, up 14.6% from a year earlier. But it was still a slower pace of growth compared to the third quarter, when median prices rose 15.9% year-over-year.

    What will my monthly mortgage payment be?
    As home prices and mortgage rates continued to rise, affording a home became even more difficult during the fourth quarter. The monthly mortgage payment on a typical existing single-family home with a 20% down payment rose by $201 from a year ago to $1,240. That’s about 17% of the median family income.

      “Homebuyers in the last quarter saw little relief as home prices continued to climb, albeit not as fast as earlier in the year,” said Lawrence Yun, NAR’s chief economist. “The increasing prices are indicative of a seller’s market, with an abundance of eager buyers and very limited supply.”

      Where prices are rising the fastest

      The South was the standout for price growth in the fourth quarter with prices rising by 17.9% from the year before, the report showed.
      The biggest price jumps were seen in cities in the sunbelt and mountain states. Punta Gorda, Florida, was up 28.7%, the biggest home price growth from a year prior. It was followed by Ocala, Florida; Austin, Texas; Phoenix; Denison, Texas; Tucson, Arizona; Las Vegas; Ogden, Utah; Salt Lake City; and Boise, Idaho, which were all up over 24% from a year earlier.
      Here's how much house you can afford in your area
      The most expensive cities got more expensive, with nine of the top 10 priciest cities seeing surges in the double digits.
      The priciest city in the fourth quarter continued to be San Jose, California, with a median home price of $1,675,000, which was up 19.6% from the previous year. It was followed by San Francisco, with a median price of $1,310,000, Anaheim, California, with a median price of $1,150,000, and urban Honolulu, Hawaii, with a median price of $1,054,500.
      The rest of the top ten most expensive home markets were San Diego; Los Angeles; Boulder, Colorado; Seattle; Naples, Florida; and Long Island, New York.
      There were 20 cities where a buyer needed more than $100,000 to afford a 10% down payment, up from 17 markets in the previous quarter. Some of these cities include the most expensive cities, as well as Portland, Oregon; Boston; New York City; Stamford, Connecticut; Reno, Nevada; and Washington, DC.
      On the other hand, in 81 other markets where the median sales price was at least $267,700 or less, a family needed less than $50,000 to afford a home. That was down slightly from 83 cities the previous quarter.

        There were 12 cities where the median home sales price was less than $160,000, and a family generally needed less than $30,000 to purchase a home. Those areas included Peoria, Illinois; Davenport, Iowa; Waterloo, Iowa; Youngstown, Ohio; Erie, Pennsylvania; Binghamton, New York; and Elmira, New York.
        “The good news is that home prices should begin to normalize later in 2022 as more homes come on the market,” said Yun.
        Source: Read Full Article