Fewer U.S. housing markets are seeing double-digit gains in prices as affordability becomes more of a challenge in some areas.
In the second quarter, prices rose 10 percent or more from a year earlier in 25 metropolitan areas, down from 28 markets in the first quarter and 34 in the second quarter of 2015, the National Association of Realtors said Wednesday.
Home prices have been outpacing income gains, making it harder for some buyers to compete in many of the strongest markets across the U.S. The median price of an existing single-family home rose from a year earlier in 83 percent of the 178 markets measured, the group said in the report. For the first time ever, a metro area -- San Jose, California -- had a median price of more than $1 million.
“Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities,” Lawrence Yun, the group’s chief economist, said in the statement. “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent -– and in many markets at a rate well above income growth.”
The median price of an existing single-family home was $240,700 in the second quarter, up 4.9 percent from a year earlier, the Realtors said. Prices declined in 29 metro areas, or 16 percent of the markets tracked.