Nationwide, the median listing price for a home rose to $370,000 in March, according to the Monthly Housing Trends report for March from Realtor.com, a 15.6 percent increase over March 2020 and a record price since Realtor.com began tracking listing prices in 2012.
In addition, Realtor.com reported that the number of homes on the market in March was 52 percent lower than in March 2020. While some housing markets are seeing more homes listed for sale as the spring market progresses, nationally there are still 117,000 fewer homes listed for sale each month compared with the typical number of homes listed each month in recent years.
Listing prices in the nation’s largest metro areas rose by an average of 12.1 percent in March compared with March 2020, according to Realtor.com, but in some metro areas the average listing price grew at a much faster pace.
Median listing prices were up 39.8 percent in Austin, up 28.3 percent in Buffalo and up 24.8 percent in Los Angeles compared with March 2020. Median listing prices were up 10.5 percent in the New York City metro area, but up just 1 percent in the D.C. metro area in March compared with the same time last year.
Analysis of first quarter 2021 numbers by ATTOM Data Solutions found that areas where the median priced home is affordable to the average local wage earner is shrinking but remains barely the majority at 52 percent. During the first quarter of 2020, homes were more affordable than historic averages in 63 percent of counties. Five years ago, during the first quarter of 2016, homes were more affordable than the historic average in 95 counties.
ATTOM calculates affordability by comparing the amount of income needed for monthly homeownership expenses including the mortgage payment, property taxes and homeowner’s insurance for the median-priced home, assuming a 20 percent down payment. That income requirement is compared with Bureau of Labor Statistics wage information. In addition, the “affordability” calculation assumes 28 percent of the borrowers’ gross monthly income is required for their housing payment, which is the preference for lenders for a mortgage approval.
The combination of low mortgage rates and rising wages for those who were able to stay employed during the pandemic allowed homes to remain affordable in many locations, but rising mortgage rates could put more pressure on buyers in the coming months. ATTOM reports that home prices rose more than wages in nearly 90 percent of markets, another indication that affordability is likely to weaken in the coming year.
For the full Realtor.com report, click here.
For the full ATTOM report, click here.
Read more Real Estate: