Home-price gains accelerated as borrowing costs fell
Home-price growth is accelerating again. Give credit to this year’s plunge in mortgage rates.
In the third quarter, the median price of an existing single-family home in the U.S. was $280,200, up 5.1% from a year earlier, the National Association of Realtors said in a report Thursday. By comparison, the annual gain in the second quarter was 4.3%.
After a slump spurred by the 2018 jump in mortgage rates, the housing market is getting a lift from this year's decline in borrowing costs. With more buyers searching for homes comes tougher competition and higher prices.
"The housing market has been seeing reacceleration in home prices as more buyers want to take on lower interest rates in the midst of insufficient supply," said Lawrence Yun, chief economist at NAR.
There's no telling how long the rebound will last. Values have climbed faster than incomes, meaning many Americans have to stretch to afford a purchase. And mortgage rates have been inching higher in the past month.
Prices rose from a year earlier in 93% of the 178 metropolitan areas tracked by the Realtors' group, up from 91% last quarter.
Areas with big annual gains included Salt Lake City and Spokane, where prices jumped about 12%, and Boise, Idaho, with a 10% increase. Prices declined 4.6% in San Jose, Calif., which continues to struggle with an affordability crisis.