Home prices are on the up, but that may lead to trouble in the future.
The median cost of a single-family home jumped 12 percent in the third quarter to $313,500, marking the biggest year-over-year increase since 2013, according to data from the National Association of Realtors that was first reported by Bloomberg.
Prices increased in all 181 metropolitan areas NAR tracks, the organization said in a report published Thursday. Some of the largest gains were seen in Bridgeport, Connecticut (27.3 percent); Crestview, Florida (27.1 percent); and Pittsfield, Massachsuettes (26.9 percent).
Buyers have been motivated by low mortgage interest rates, but the jump in prices has fueled concerns about the country’s affordable housing crisis.
“Favorable mortgage rates will continue to bring fresh buyers to the market,” said Lawrence Yun, NAR’s chief economist. “However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.”
Concerns about social distancing, along with an uptick in remote work, have also created greater demand for homes in areas with more space.
“In light of the pandemic, prices jumped in a number of metros that contain larger properties and open space — where families could find extra rooms, including areas for an at-home office,” Yun said.
The demand has put pressure on housing supply: The total number of homes on the market at the end of last quarter — 1.47 million — was almost 20 percent lower than the same time last year, NAR said. By the group’s calculation, it would take 2.7 months to sell that inventory at the current pace.
The most expensive metro areas to buy homes in are primarily on the West Coast, including San Jose, San Francisco and Anaheim in California. Two East Coast areas — Bridgeport, Connecticut and Boston — made it into the top ten.