February 14th, 2013
Home prices rose in several major metropolitan areas during the fourth quarter, signaling another period of strengthening home values and continued market recovery.
The National Association of Realtors reports national home prices experienced the biggest year-over-year increase in seven years. Further, median existing single-family home prices rose in 133 out of 152 metropolitan statistical areas in the fourth quarter, while only 19 metros experienced declines in prices. This is a significant improvement from fourth quarter figures reported in 2011, in which only 29 metro areas saw price increases. NAR chief economist Lawrence Yun noted that all the factors that contribute to price growth are currently working.
“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” said Yun. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”
Although prices are rising in the majority of locations nationwide, it’s still crucial that buyers work with a real estate professional to narrow down which neighborhoods are experiencing overall housing market strength. Each community may offer different amenities and experience varied levels of growth, and working with a professional can help buyers locate the right neighborhood for their unique housing needs. Once focused in on the right neighborhood, buyers should be pre-approved by their mortgage services company to give them a clear picture of how much they can afford.