A development of large suburban homes.

Nearly 60% of major metros saw home prices rise last quarter 

Many of the biggest annual price gains were in the Midwest, with Fond du Lac, Wisconsin, leading the way with a 25.3% gain.

August 10, 2023
2 minutes

Key points:

  • The national median price for an existing single-family home in the last quarter was $402,600, NAR reported.
  • A handful of metros, primarily in the Midwest and East, saw double-digit price growth.
  • Austin saw the biggest drop in home prices, and several previously booming cities in the West also posted declines.

According to the National Association of Realtors' quarterly metro market report, 128 out of 221 of the top metro areas in the country — nearly 60% — saw home prices rise during the second quarter of this year.

A few areas even experienced double-digit price increases during that period, although the percentage of metros with big gains declined from 7% in the first quarter to 5% in Q2. Meanwhile, 90 of the 221 metro areas saw their home prices fall.

The national median price for an existing single-family home was $402,600, a 2.4% decline from the same period a year ago. NAR's report pegged the typical mortgage for a single-family home with a 20% down payment at $2,051 per month, up 10% from $1,864 in the first quarter.

The lack of inventory of existing homes has been a major catalyst for home price growth during this period, which has also impacted affordability for first-time homebuyers and move-up buyers. 

First-time buyers in particular felt the squeeze in the second quarter, typically spending 40.7% of their household income on mortgage payments, up from 37.1% in Q1.

While first-time buyers spent a higher proportion of their income on housing, they weren't the only ones to see costs go up. Overall, families were spending more to cover their mortgage, dedicating roughly 27% of their income to mortgage payments, an increase from 24.5% the previous quarter. 

However, not all markets are created equal, and there were regional differences in price gains (or reductions) during the past quarter. 

"Interestingly, price declines occurred in some of the fastest job-creating markets," NAR Chief Economist Lawrence Yun said in the report. "Prices in these areas are trying to land on better fundamentals after several years of skyrocketing increases. In fact, the number of homes receiving multiple offers, alongside continuing job and wage gains, signal price slides may already be a thing of the past."

Six of the ten markets with the biggest year-over-year price gains were in the Midwest — a trend seen in other recent housing reports. The five metros to see the biggest home price gains were Fond du Lac, WI (25.3%); New Bern, NC (19.7%); Duluth, MN (14.6%); Davenport, IA (12.6%); and Allentown, PA (11.7%). 

Meanwhile, the biggest declines were in Austin (-19.1%); San Francisco (-11.3%); Salt Lake City (-9.6%); and Las Vegas (-7.4%).

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