(NewsNation) — Home prices shot up in more than 85% of metro markets last quarter as mortgage rates dropped from their highest level in over two decades, according to new data released Thursday.
Sales prices for single-family existing homes increased in 189 of the 221 metro areas measured by the National Association of Realtors (NAR) in the fourth quarter of 2023. The national median price was $391,700, up 3.5% from the year before.
The latest price jump comes after mortgage rates fell from their highest level in 23 years — an indication that further easing could spur demand and increase competition for limited inventory.
A typical monthly mortgage payment rose to more than $2,000 last year, up from $1,000 three years ago, according to NAR Chief Economist Lawrence Yun.
“This doubling in housing costs for recent home buyers is not included in the official consumer price index inflation calculations and contributes to the sense of dissatisfaction about the economy,” Yun said in a statement.
A family needed a qualifying income of at least $100,000 to afford a 10% down payment mortgage in nearly half of the markets last quarter, NAR found.
The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,163 — up 10% from a year ago. Although that’s down slightly, 1.2%, from last quarter, thanks to the drop in mortgage rates.
Price jumps varied by region, with the Northeast recording the most significant uptick, up 7.3% year-over-year.
At the metro level, Dayton, Ohio (19.9%); Kingsport-Bristol-Bristol, Tenn.-Va. (19.2%); Fond du Lac, Wis. (18.6%) saw the largest year-over-year median prices increases, according to NAR.
Eight of the top 10 most expensive housing markets in the U.S. were in California, with Sillicon Valley leading the way.