Depending on whether you are a homeowner or homebuyer, consistently rising house prices could be a good thing or a not quite as good thing. And while house prices are still rising in nearly every major housing market, the rate at which they’re rising is moderating a bit.
According to a new report from the National Association of Realtors, home prices continued to rise in 99% of the nation’s major metro areas between the third quarter of 2020 and the third quarter of 2021.
However, the rate of price growth in the third quarter decreased from the second quarter.
According to the NAR report, the median sales price of single-family existing homes rose by 22.9% to $357,900 from the second quarter of 2020 to the second quarter of 2021.
In the third quarter, the median sales price of single-family existing homes increased by 16% year-over-year. So, while home prices are still rising, they’re not rising as quickly as they were before.
Another way to look at the moderating rate of price growth is the number of housing markets that saw a double-digit increase in house prices.
In the second quarter, 94% of the largest 183 housing markets saw house prices rise by double digits. In the third quarter, 78% of those same housing markets experienced double-digit increases in house prices.
Broken out by region, each of the four major regions saw double-digit price growth, led by the Northeast (17.5%), followed by the South (14.9%), the Midwest (10.7%), and the West (10.3%).
The markets with the highest yearly price gains were: Austin-Round Rock, Texas (33.5%); Naples-Immokalee-Marco Island, Fla. (32.0%); Boise City-Nampa, Idaho (31.5%); Ocala, Fla. (29.7%); Punta Gorda, Fla. (27.5%); Salt Lake City, Utah (26.2%); Phoenix-Mesa-Scottsdale, Ariz. (25.8%); Sebastian-Vero Beach, Fla. (25.7%); Port St. Lucie, Fla. (24.9%); and New York-Jersey City-White Plains, N.Y.-N.J. (24.5%).
The moderation in home price growth seen in the third quarter should continue, according to NAR Chief Economist Lawrence Yun.
"Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter," Yun said. "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."