Home-price increases moderated in much of the U.S. in the third quarter as more properties came to the market and investor purchases declined.
The median price of an existing single-family home rose from a year earlier in 73 percent of the 172 metropolitan areas measured, the National Association of Realtors said in a report today. Sixteen areas had gains of 10 percent or more, compared with 54 areas in the third quarter of 2013. Prices declined in 47 regions.
Homebuyers are facing less competition from investors in a market with more supply. About 2.3 million previously owned houses were listed for sale at the end of the third quarter, up 6 percent from a year earlier, according to the report. Investors made 14 percent of existing-home purchases in September, down from 19 percent a year earlier, the Realtors group said two weeks ago.
Prices are “moderating because the investors have dropped out of the market,” Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts, said in a telephone interview yesterday. “The market is being driven by the fundamentals, where in the last three or four years, investors played a bigger role in driving prices up. Now it’s being driven more by non-investment buyers, which is healthy.”
The number of markets with price gains was little changed from the second quarter, when 71 percent of areas had increases, the Realtors group said.
The median price for an existing single-family house in the three months through September was $217,300, up 4.9 percent from the third quarter of 2013, according to the report.
The best-performing area in the third quarter was Daytona Beach, Florida, where the median price jumped 26 percent from a year earlier. Prices climbed 22 percent in Toledo, Ohio; and 16 percent in Naples, Florida.
The area with the biggest decline was Cumberland, Maryland, where prices slid 15 percent from a year earlier. Following were Norwich, Connecticut, with an 11 percent drop; and Tampa, Florida, with a 9.3 percent decline.