The following information comes from the latest quarterly report by the National Association of REALTORS®.

Nearly 60% of metropolitan markets, specifically 128 out of 221, observed increases in home prices during the second quarter of 2023, while 30-year fixed mortgage rates fluctuated between 6.28% and 6.71%. In the same period, five percent of the 221 monitored metro areas saw double-digit price growth, a decrease from the seven percent reported in the first quarter.

Chief Economist Lawrence Yun from the NAR stated, "Higher mortgage rates and limited inventory led to a decline in home sales. However, affordability challenges are improving due to moderating or even falling home prices, coupled with rising job opportunities and incomes."

In comparison to the previous year, the median national price for existing single-family homes experienced a 2.4% decrease, reaching $402,600. In the preceding quarter, the year-over-year national median price dropped by 0.2%.

Yun further added, "Similar to weather patterns, significant variations exist in local markets despite the minor shifts in the national home price."

Among the major U.S. regions, the South accounted for the largest share of single-family existing-home sales (46%) in the second quarter, despite a 2.2% year-over-year price decline. Prices increased by 3.2% in the Northeast and 1.4% in the Midwest, while experiencing a 5.8% decline in the West.

Yun noted, "Interestingly, some of the fastest-growing job markets experienced price drops. These areas are recalibrating to more sustainable price growth after years of rapid increases. The presence of multiple offers on homes, along with ongoing job and wage gains, suggests that price declines may already be in the rearview mirror."

The top 10 metro areas with the highest year-over-year price growth achieved gains of at least 10.4%, with six of these markets located in the Midwest. These include Fond du Lac, Wis. (25.3%); New Bern, N.C. (19.7%); Duluth, Minn.-Wis. (14.6%); Davenport-Moline-Rock Island, Iowa-Ill. (12.6%); Allentown-Bethlehem-Easton, Pa.-N.J. (11.7%); Kingsport-Bristol-Bristol, Tenn.-Va. (11.5%); Peoria, Ill. (11.5%); Green Bay, Wis. (10.9%); Trenton, N.J. (10.5%); and Cape Girardeau, Mo.-Ill. (10.4%).

Seven out of the top 10 most expensive markets in the U.S. were situated in California. 

Approximately 41% of markets (90 out of 221) witnessed a decline in home prices during the second quarter, up from 31% in the first quarter.

Housing affordability worsened from the first quarter to the second quarter due to rising home prices and mortgage rates. The monthly mortgage payment for a typical existing single-family home with a 20% down payment rose to $2,051, marking a 10% increase from the first quarter ($1,864) and an 11.6% increase – equivalent to $214 – from the previous year. Families typically allocated 27% of their income to mortgage payments, up from 24.5% in the prior quarter and 25.3% from one year ago.

The shortage of inventory and affordability concerns continued to impact first-time buyers during the second quarter. For a typical starter home valued at $342,200 with a 10% down payment loan, the monthly mortgage payment increased to $2,012, reflecting a 9.9% rise from the previous quarter ($1,830). This was an increase of over $200, or 11.3%, from the previous year ($1,807). First-time buyers generally devoted 40.7% of their family income to mortgage payments, up from 37.1% in the prior quarter.

In the second quarter, a family needed an income of at least $100,000 to afford a 10% down payment mortgage in 40.3% of markets, up from 33% in the prior quarter. Conversely, a family needed an income of less than $50,000 to afford a home in 6.3% of markets, down from 10% in the previous quarter.

The National Association of REALTORS® is the largest trade association in the U.S., representing over 1.5 million members engaged in various aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies real estate professionals who are members of the National Association of REALTORS® and adhere to its strict Code of Ethics.