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Home prices in the United States posted solid gains in the fourth quarter of 2014, with the majority of metro areas seeing a slightly stronger price growth. This growth was propelled by tight housing supplies, low interest rates, and a strengthening job market, according to the latest quarterly report from the National Association of Realtors. It means that the national median existing single family home price was $208,700 in the fourth quarter, up 6% year on year and the median existing single family home price rose in 150 out of the 175 metro markets tracked, some 86%. That marks a stronger price gain compared to the third quarter when 73% of the metro areas had posted increases. The data also shows that 24 areas, or 14%, saw double digit increases in the fourth quarter. ‘Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average,’ said Lawrence Yun, NAR’s chief economist. ‘This is good news for current home owners, but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,’ he explained. Meanwhile, total existing home sales, including single family and condos, fell 1% in the fourth quarter to a seasonally adjusted annual rate of 5.07 million. But existing home sales are still 2.6% higher year on year. By the end of the fourth quarter, 1.85 million existing homes were available for sale, which is slightly below the 2.01 million homes for sale during the fourth quarter of 2013. The average supply was 4.9 months in the fourth quarter. Most economists consider a supply of six to seven months a healthy balance of supply between buyers and sellers. ‘Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas, particularly in the West, where the current supply of new and existing homes for sale is failing to keep pace with overall demand and growing populations,’ Yun pointed out. ‘Unless home builders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring,’ he added. The most expensive housing markets in the fourth quarter were San Jose, California, where the median existing single family home price reached $855,000, followed by San Francisco at $742,900, Honolulu at $701,300, Anaheim-Santa Ana, California at $688,500 and San Diego at $493,100. A regional breakdown shows that in the Northeast total existing home sales increased 2.5% in the fourth quarter and are 4.1% below the fourth quarter of 2013. Median existing single family home price was $246,300, up 2.2% from a year ago. In the Midwest existing home sales fell 4.7% in the fourth quarter and are 0.6% below a year ago. Median existing single family home prices reached $162,000, a 6.2% jump… Continue reading →
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