Virtually Every Metro Area Experienced Home Prices Rise in First Quarter of 2021
- Eighty-nine percent of metro areas had double-digit price gains.
- The median existing single-family sales price rose at an annual pace of 16.2%, a record high since 1989.
- The average national monthly mortgage payment rose to $1,067 from $995 a year ago.
WASHINGTON (May 11, 2021) – Nearly every metro area tracked by the National Association of Realtors® — 99% — recorded year-over-year price increases in the first quarter of 2021, according to the latest quarterly report released by NAR.
The 11 metro areas with the highest price increases saw median sales prices ranging from the $100,000s to $600,000s. Those cities include: Kingston, N.Y. (35.5%; $303,100); Bridgeport-Stamford-Norwalk, Conn. (34.3%; $580,400); Atlantic City-Hammonton, N.J. (34.0%; $277,200); Barnstable Town, Mass. (33.1%; $567,600); Boise City-Nampa, Idaho (32.8%; $422,600); Sherman-Denison, Texas (29.8%; $234,800); Elmira, N.Y. (29.1%; $126,900); Austin-Round Rock, Texas (28.2%; $437,900); Youngstown-Warren-Boardman, Ohio-Pa. (27.7%; $119,500); Decatur, Ill. (27.5%; $102,400); and Glens Falls, N.Y. (27.5%; $214,600).
Some of the changes in median-home price, especially in small cities, were dependent on the type of homes sold during Q1 2021; not all homes saw large appreciations in price.
"Significant price increases throughout the country simply illustrate strong demand and record-low housing supply," said Lawrence Yun, NAR chief economist. "The record-high home prices are happening across nearly all markets, big and small, even in those metros that have long been considered off-the-radar in prior years for many home seekers."
The overwhelmingly majority of metros experienced strong price increases, with 89% (163 metro areas out of 183) registering double-digit price growth.1 For comparison, 25% of metro areas (46 out of 181) saw such growth in 2020's first quarter when housing inventory was at a healthier level of 3.3 months, which better matched the pace of monthly demand.
Although home sellers have benefited from sharp price jumps, the situation has of course presented challenges for buyers.
"The sudden price appreciation is impacting affordability, especially among first-time home buyers," said Yun. "With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely."
The most expensive markets also continued to experience double-digit price growth. Those metros include San Jose-Sunnyvale-Santa Clara, Calif. ($1.5 million; 11.1%); San Francisco-Oakland-Hayward, Calif. ($1.2 million; 21.8%); Anaheim-Santa Ana-Irvine, Calif. ($1.0 million; 14.3%); Urban Honolulu, Hawaii ($940,400; 19.2%); San Diego-Carlsbad, Calif. ($763,500; 14.0%); Boulder, Colo.($726,600; 16.7%); Los Angeles-Long Beach-Glendale, Calif. ($682,400; 15.1%); Seattle-Tacoma-Bellevue, Wash. ($653,400; 17.9%); Naples-Immokalee-Marco Island, Fla. ($599,500; 24.9%); and Nassau County-Suffolk County, N.Y. ($598,600; 22.7%).
Nationally, the median existing-home sales price rose 16.2% on a year-over-year basis to $319,200, a record high since 1989. All regions recorded double-digit year-over-year price growth, with the Northeast seeing a 22.1% increase, followed by the West (18.0%), South (15.0%) and Midwest (14.4%).
"These higher home prices underscore the importance of stepping up housing supply," he said. "An increase of inventory — either by new construction or by converting abandoned and unused retails or hotels — would combat the affordability problem."
A new NAR report, the Case Studies on Repurposing Vacant Hotels/Motels into Multifamily Housing, examines the feasibility and benefits of these types of transformations.
As a result of soaring home prices, the average national monthly mortgage payment rose to $1,067, up from $995 one year ago. This increase exists even as the effective 30-year fixed mortgage rate2 decreased to 2.93% in the first quarter of 2021 (3.57% one year ago).
In the first quarter, on average, families with a median income of $90,547 spent 14.1% of that income on mortgage payments with a 20% down payment and a 30-year fixed mortgage (14.5% one year ago). Mortgage payments are considered affordable if they amount to no more than 25% of the family's income.3
Nationally, a family typically needed an income of $51,216 to pay a 30-year fixed-rate mortgage with a 20% down payment ($47,760 one year ago). In 68% of the measured markets (125 of the 183 metro areas), a family needed less than $50,000 to afford a home.
In eight metro areas, a family needed more than $100,000: San Jose-Sunnyvale-Santa Clara, Calif. ($242,682); San Francisco-Oakland-Hayward, Calif. ($194,145); Anaheim-Santa Ana-Irvine, Calif. ($161,788); Urban Honolulu, Hawaii ($152,145); San Diego-Carlsbad, Calif. ($123,525); Boulder, Colo. ($117,555); Los Angeles-Long Beach-Glendale, Calif. ($110,404); and Seattle-Tacoma-Bellevue, Wash. ($105,712).
The National Association of Realtors® is America's largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: NAR releases quarterly median single-family price data for approximately 183 Metropolitan Statistical Areas (MSAs). In some cases, the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.
Data tables for MSA home prices (single-family and condo) are posted at https://www.nar.realtor/research-and-statistics/housing-statistics/metropolitan-median-area-prices-and-affordability. If insufficient data is reported for an MSA in a particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.
Information about NAR is available at www.nar.realtor. This and other news releases are posted in the newsroom in the "About NAR" tab.
1 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at: https://www.census.gov/geographies/reference-files/time-series/demo/metro-micro/delineation-files.html.
Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.
Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.
NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series dates back to 1989.
Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.
The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single-family, townhomes, condominiums and co-operative housing.
2 This is the effective mortgage rate based on Freddie Mac's 30-year fixed contract rate mortgage, points and fees.
3 Housing costs are burdensome if they take up more than 30% of income. The 25% share of mortgage payment to income considers the idea that homeowners have additional expenses, including mortgage insurance, home insurance, taxes, and expenses for property maintenance.