Home prices soar in third quarter as housing market remains hot

Harry Wilmerding, DCNF

Median home prices surged in the third quarter of 2021 in almost every housing market in the U.S., the National Association of Realtors said in a report Wednesday.

The median price of a single-family home increased in 182 out of the 183 markets tracked by the National Association of Realtors (NAR). Prices grew by 10% from the previous year in 78% of the 182 markets.

The median price of single-family, existing-home sales surged 16% to $363,700 from a year before, according to the report.

The median sales price of single-family existing homes rose in 99% of 183 measured market areas in the third quarter, with double-digit price gains in 78% of the markets. https://t.co/mM55oNIIRr

— National Association of REALTORS® (@nardotrealtor) November 10, 2021

The surge in prices was triggered by strong demand from homebuyers and historically low inventory, while mortgage rates are projected to increase, according to the report.

“Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter,” NAR chief economist Lawrence Yu said in the report. “I expect more homes to hit the market as early as next year, and that additional inventory, combined with higher mortgage rates, should markedly reduce the speed of price increases.”

Buyers are also looking for larger homes and a better quality of life as they continue to work remotely, the Wall Street Journal reported.

“The geographic shifts that are becoming possible in the era of remote working [are] really beginning to settle in,” David Doctorow, chief executive of Realtor.com’s parent company, Move Inc, told the Wall Street Journal. “We really believe that we’re still in the early stages of all those shifts.”

The Austin, Texas, metro area saw the highest median price increase in the third quarter, growing 33.5% on a year-over-year basis, according to the report. Naples, Florida, saw the second-biggest jump, growing 32%, followed by Boise, Idaho, up 31.5%.

“While buyers bidding wars lessened in the third quarter compared to early 2021, consumers still faced stiff competition for homes located in the top ten markets,” Yun said. “Most properties were only on the market for a few days before being listed as under contract.

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