“The fourth quarter of 2020 presented ripe circumstances to raise house prices,” said Lawrence Yun, chief economist at the NAR. “Mortgage rates hit record lows, which increased demand,” he said. “At the same time, inventory levels also hit record lows, leading to painful supply-side inventory conditions in the fourth quarter.”
This meant that the payment of a monthly mortgage for a typical single-family home (which is not newly built) rose to $ 1,040, from $ 1,020 the previous year, while the family income needed to afford housing increased at $ 49,908, compared to $ 48,960 a year ago.
All regions of the country experienced double-digit year-on-year price growth. The northeast obtained the largest increase with 21%, followed by a west with 16%, a middle west with 15% and finally a south with 14%.
The subway areas with the largest house price increases were concentrated in the Northeast and Florida, with Idaho and Washington also experiencing large increases.
The biggest winners were Bridgeport, Connecticut, up 40%; Pittsfield, Massachusetts, up 32%; Atlantic City, New Jersey, 30% more; Naples, Florida, 30% more; Barnstable, Massachusetts, 29% more; Crestview, Florida, 29% more; Boise City, Idaho, up 27%; Binghamton, New York, up 24%; Kingston, New York, up 24%; and Spokane, Washington, up 24%.
Holiday destinations like Atlantic City, Naples and Barnstable in Cape Cod appeared to be popular, along with more affordable small towns within driving distance of major cities such as Binghamton and Kingston in New York, according to NAR.
“While tourism was a huge global success throughout 2020, our data show that vacation homes still fared well in terms of sales,” Yun said. “Many people bought in these areas because they found new freedoms to work from home.”
The most expensive area in the country was San Jose, California, with an average home sale price of $ 1.4 million. Then there was San Francisco, with $ 1.14 million; Anaheim, California, with $ 935,000; Honolulu, at $ 902,500; San Diego, with $ 740,000; Los Angeles at $ 688,700; Boulder, Colorado, at $ 661,300; Seattle at $ 614,700; In Nassau County, New York, at $ 591,600; and Boston at $ 579,100.
All of these more expensive markets experienced double-digit growth in median sales of existing single-family homes during the fourth quarter, with the exception of Boulder.
Home sellers have experienced a positive rise in prices. But these big price changes could soon turn off new buyers.
“The average working family is struggling to keep up with house prices rising much faster than incomes,” Yun said. “This causes a consumer to become a real buyer, which causes them to lose the wealth accumulation of the property.”