(Bloomberg) – Prices for single-family homes in the United States rose 12% in the third quarter, the largest annual increase in seven years, according to the National Association of Realtors.
The cost of housing is rising everywhere, adding to affordability concerns as millions of Americans lose their income during the pandemic. Prices were up from a year earlier in the 181 metropolitan areas measured by the group, and 117 regions posted double-digit gains, up from just 15 in the second quarter, according to a report released Thursday.
Mortgage rates near their all-time low have fueled a surge in demand as buyers vie for an increasingly scarce supply of listings. Many are rushing to the suburbs, looking for more space to quarantine comfortably. Unless borrowing costs drop much more, first-time buyers will increasingly be excluded from home ownership.
“Favorable mortgage rates will continue to bring new buyers into the market,” said Lawrence Yun, chief economist at Realtor Group. “However, the affordability situation will not improve even with low interest rates, as house prices are rising far too quickly.”
The nationwide median price of a single-family home in the quarter was $ 313,500, according to the report.
Fairfield County, Connecticut – home to Tony enclaves like Greenwich, as well as Bridgeport, one of the state’s poorest cities – saw the biggest price increase, with 27.3%. Next is Crestview, Florida; Pittsfield, Massachusetts; Kingston, New York; Atlantic City, New Jersey; and Boise, Idaho.
At the end of the quarter, 1.47 million previously owned homes were available for sale in the United States, down 19.2% from a year earlier. It would only take 2.7 months to sell these homes at the current rate of transactions.
© 2020 Bloomberg L.P.