The first quarter of 2022 saw more markets reach double-digit annual price gains than the previous quarter, according to the National Association of Realtors’ latest quarterly report. Seventy percent of 185 measured metros experienced such price gains, up from 66 percent in the preceding quarter.
These increases come as median single-family existing-home prices rose at a faster rate nationally – 15.7 percent – from one year ago, up to $368,200. In comparison, the year-over-year pace in the prior quarter was 14.3 percent. Notably, the South region made up 45 percent of single-family existing-home sales in the first quarter and notched a double-digit price appreciation of 20.1 percent. Meanwhile, the Northeast saw a climb of 6.7 percent, the Midwest 8.5 percent, and the West 5.9 perecent.
“Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022,” said Lawrence Yun, NAR chief economist. “Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”
Yun notes his prediction is based on an expectation of further supply for the upcoming quarter, citing that the beginning of the first quarter registered a record-low amount of inventory. He also anticipates other changes.
“I expect more pullback in housing demand as mortgage rates take a heavier toll on affordability,” he added. “There are no indications that rates will ease anytime soon.”
The top 10 areas with the highest year-over-year price gains were made up of midsize and small markets, with half of the sites located in Florida. Those include Punta Gorda, Florida (34.4 percent); Ocala, Florida (33.8 percent); Ogden-Clearfield, Utah (30.8 percent); Lakeland-Winter Haven, Florida (30.1 percent); Decatur, Alabama (28.9 percent); Tampa-St. Petersburg-Clearwater, Florida (28.8 percent); Fort Collins, Colorado (28.4 percent); North Point-Bradenton-Sarasota, Florida (28.0 percent); Myrtle Beach-Conway-North Myrtle Beach, North Carolina-South Carolina (28.0 percent); and Salt Lake City, Utah (27.9 percent).
“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.”
With sustained price appreciation and higher mortgage rates, affordability greatly worsened in the first quarter of 2022. The monthly mortgage payment on a typical existing single-family home with a 20 percent down payment rose to $1,383, which is up $319, or 30 percent, from one year ago. Families typically spent 18.7 percent of their income on mortgage payments (14.2 percent one year ago).