August 24, 2014

NAR: 2Q home-price growth slows

Aug. 14, 2104 – Home-price growth slowed in many metropolitan areas, and national year-over-year price appreciation is now at its slowest pace since 2012, according to second-quarter data released Tuesday by the National Association of Realtors.

NAFCU Senior Economist Curt Long welcomed this growth deceleration. "Median home prices grew by nearly 20 percent over the past six months, which priced out many prospective buyers," he said. "Home sales have been sluggish throughout the year, so speaking strictly in terms of the home purchase market, a deceleration in price increases is a welcome development."

NAR Chief Economist Lawrence Yun said home prices are reaching a level that is both good for buyers and sellers. "National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth," he said in a statement Tuesday. "At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose."

NAR data reports that the national median existing single-family home price in the second quarter was $212,400, up 4.4 percent from the second quarter of 2013. Also in the second quarter, total existing-home sales increased 5.8 percent to a seasonally adjusted annual rate of 4.87 million but is below the 5.1 million pace during the second quarter of 2013.

NAR's statement on the data also noted that "total housing inventory showed much-needed improvement at the end of the second quarter at 2.30 million existing homes available for sale, which is 6.5 percent higher than a year ago."