Us house price growth returns to normal

Photo credit: Michael Patrick

The figures from from the National Association of Realtors show that all four major regions saw increases at or below 5 percent from a year ago in the third quarter of 2014.

The median existing single-family home price increased in 73 percent of measured markets, with 125 out of 172 metropolitan statistical areas showing gains year-on-year.

The number of rising markets in the third quarter was mostly unchanged from the second quarter, when price increases were recorded in 71 per cent of metro areas. 16 areas in the third quarter (9 per cent) had double-digit increases, a sharp decline from the 54 areas (33 per cent) in the third quarter of 2013. Nineteen areas experienced increases in the double-digits in the second quarter of this year.

Lawrence Yun, NAR chief economist, says home prices in the third quarter continued to stabilize towards a healthier rate of growth.

"Home-price gains returned to more normalized levels of low- to mid-single digit rate of appreciation in many metro markets as inventory levels steadily increased," he comments. "Moreover, there are a good number of local markets that are still remarkably affordable with median prices at or under $200,000."

The national median existing single-family home price in the third quarter was $217,300, up 4.9 per cent from the third quarter of 2013 ($207,100). The median price during the second quarter of 2014 increased 4.2 per cent from a year earlier.

Total existing-home sales, including single family and condo, increased 5.2 percent to a seasonally adjusted annual rate of 5.12 million in the third quarter from 4.87 million in the second quarter, but are still 3.8 percent below the 5.32 million pace during the third quarter of 2013.

Yun adds: “Given the improving labor market and historically low interest rates, more buyers are anticipated to enter the market next year.”