According to the latest National Association of Realtors® Quarterly Report, released on Tuesday (5-3-22), Q1 of 2022 saw more markets reach double-digit annual prices gains than in Q4 of 2021. Seventy percent of 185 measured metros experienced such price gains, up from 66% in the previous quarter.
The report reveals that the increases come as median single-family existing-homes prices rose at a faster rate nationally from one year ago, up 15.7% to $368,200. In comparison, the year-over-year pace in the Q4 of 2021 was 14.3%. Notably, the South region made up 45% of single-family existing-home sales in Q1 of 2022 and notched a double-digit price appreciation of 20.1%. Meanwhile, the Northeast saw a climb of 6.7%, the Midwest 8.5%, and the West 5.9%.
In comments prepared for the release of the report, Lawrence Yun, NAR’s chief economist, said, “Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022. Given the extremely low inventory, we’re unlikely to see price declines, but appreciation should slow in the coming months.”
Yun said his prediction is based on an expectation of further supply for the upcoming quarter, citing that the beginning of the first quarter registered a record-low amount of inventory. He also anticipates other changes. “I expect more pullback in housing demand as mortgage rates take a heavier toll on affordability,” he added. “There are no indications that rates will ease anytime soon.”
The reports indicated that the top 10 areas with the highest year-over-year price gains were made up of midsize and small markets, with half of the sites located in Florida. Those include Punta Gorda, Fla. (34.4%); Ocala, Fla. (33.8%); Ogden-Clearfield, Utah (30.8%); Lakeland-Winter Haven, Fla. (30.1%); Decatur, Ala. (28.9%); Tampa-St. Petersburg-Clearwater, Fla. (28.8%); Fort Collins, Colo. (28.4%); North Point-Bradenton-Sarasota, Fla. (28.0%); Myrtle Beach-Conway-North Myrtle Beach, N.C.-S.C. (28.0%); and Salt Lake City, Utah (27.9%).
Regarding that revelation, Yun said, “Traditionally, homes in these markets were viewed as relatively inexpensive, but with recent migration trends, prices have increased significantly. As more families relocate to various areas, we may see some surprising markets on our top 10 list.”
“Price gains in many smaller, tertiary cities are now outpacing those in the more expensive primary and secondary markets,” Yun added. This is due to buyers looking for less expensive housing and also a result of more opportunities to work from home, making relocation to smaller markets possible.”
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First Quarter of 2022 Brings Double-Digit Price Appreciation for 70% of Metros