For the first time since the National Association of Realtors began keeping track in 1979, a metro area’s median single-family home price has surpassed $2 million.
San Jose, nestled within the pricey San Francisco Bay Area, eclipsed the threshold by roughly $8,000 during the second quarter. The city was among the 89% of metro markets that recorded annual home price gains in Q2 — down from 93% one quarter prior as improving inventory helped curb some of the widespread appreciation that has driven down affordability on a persistent basis.
Price growth continues to sizzle in some metros, with 13% of markets logging double-digit price gains year over year. Racine, Wisconsin, led the nation with a year-over-year price gain of 19.8%. Five of the rest of the top 10 were in the Northeast, led by Glens Falls, New York (with a 19.8% annual increase); all of the top 10 metros posted gains of at least 14%.
Among major metros with a population of at least 1 million, New York had the highest year-over-year gain at 14.8%.
“The record-high home prices in most metro markets bring good and bad news,” said NAR chief economist Lawrence Yun. “It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago.”
Nationwide, the median single-family home price reached $422,100, up 4.9% annually to reach another record high.
Seven of the top 10 most expensive metros were in California, with San Francisco (median home price of $1.4 million), Anaheim ($1.4 million), San Diego ($1.1 million), Salinas ($1.0 million), Oxnard ($927,900) and San Luis Obispo ($895,300) joining San Jose. The non-California metros in the top 10 were Honolulu ($1.1 million); Boulder, Colorado ($888,300); and Naples, Florida ($867,000).
Meanwhile, the slowing in appreciation continued to spread geographically, with a larger share of markets posting annual home price declines in the second quarter (10%) than the first (3%).
“Previously fast-gaining markets took a breather in the past quarter, including Nashville, Durham, Austin, and several Florida metro areas,” Yun said. “Conversely, some markets that experienced declines last year have roared back, such as San Francisco, Anaheim, and New York.”
Affordability still worsened in the second quarter, with the typical monthly mortgage payment on an existing single-family home with a 20% downpayment at $2,262. That’s up 11.1% quarter over quarter and 10.3% year over year. Households typically spent roughly 26.5% of their income on mortgage payments in Q2, up from 24.2% in Q1 and 25.3% in Q2 2023.
