Home prices trended up in almost all U.S. metro areas during the first quarter of 2024. Out of 221 metro markets analyzed, 205 (93%) posted yearly home price gains in Q1 2024, while 30% experienced double-digit price gains during the same period — up from 15% in the fourth quarter of 2023 — according to the National Association of Realtors’ (NAR) newest quarterly report.
“Astonishingly, greater than 90% of the country’s metro areas experienced home price growth despite facing the highest mortgage rates in two decades,” NAR chief economist Lawrence Yun said in a statement. “In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
The national median single-family existing-home price sat at $389,400 during the first quarter of 2024, up 5% compared to one year ago. By contrast, the U.S. median price increased 3.4% year over year in Q4 2023.
The South led all regions with the largest share of single-family existing-home sales, at 46% in the first quarter, with year-over-year price appreciation of 3.3%. Prices rose by 11% in the Northeast, by 7.4% in the Midwest and by 7.3% in the West.
The metro areas with the highest yearly median price increases during the first quarter were Fond du Lac, Wisconsin (23.7%); Kankakee, Illinois (22%); and Rockford, Illinois (20.1%). Six of the 10 markets with the highest price appreciation were in either Illinois or Wisconsin.
Meanwhile, eight of the 10 most expensive markets in the U.S. were in California, with Honolulu and Naples, Florida, also joining the list.
“The expensive markets in the West, where home prices declined last year, are roaring back,” Yun said. “Price dips in that region were viewed as second-chance opportunities by many buyers.”
Only 7% of markets (15 of 221) experienced home price declines in the first quarter, down from 14% in Q4 2023.
Although borrowing costs rose during the first three months of the year, according to HousingWire’s Mortgage Rates Center, housing affordability improved, NAR reported.
The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,037, down from $2,161 in Q4 2023. But this figure was still up by $173 (9.3%) from one year ago.
Households typically allocated 24.2% of their income to mortgage payments, down from 26.1% in the prior quarter but up from 23.3% one year ago.
For first-time buyers, the monthly mortgage payment on the typical starter home (valued at $331,000 with a 10% down payment loan) fell to $1,998, down 5.7% from the previous quarter ($2,118). But that was an increase of $168 from one year ago when the monthly mortgage payment for a typical starter home sat at $1,830.
On average, first-time buyers spent 36.5% of their household income on mortgage payments, down from 39.3% in the prior quarter.
In 40.7% of the markets studied, a family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage, down from 47.1% in the previous quarter. Conversely, a family needed a qualifying income of less than $50,000 to afford a home in 4.5% of markets, up from 2.3% in the prior quarter.
