Every metro area tracked by the National Association of Realtors (NAR) through the fourth quarter of 2020 had home prices grow from a year ago, according to the industry trade association’s latest quarterly report. Eighty-eight percent of the metros followed (161 areas) saw double-digit price increases, according to NAR.
Only 115 metro areas had such growth in the third quarter.
“The fourth quarter of 2020 presented circumstances ripe for home price increases,” NAR Chief Economist Lawrence Yun said in a news release. “Mortgage rates reached record lows, thereby driving up the demand. At the same time, inventory levels also reached record lows, leading to grim inventory conditions of insufficient supply in the fourth quarter.”
The highest price gains were in Bridgeport, Conn. (39.2 percent); Pittsfield, Mass. (32.2 percent); Atlantic City, N. J. (30 percent); Naples, Fla. (29.9 percent); Barnstable, Mass. (28.9 percent); Crestview, Fla. (28.6 percent); Boise City, Idaho (27.1 percent); Binghamton, N.Y. (24.4 percent); Kingston, N.Y. (24.2 percent); and Spokane, Wash. (23.6 percent).
In addition, national destination sites such as Atlantic City, Barnstable, and Naples, along with small towns within driving distance from major cities like Binghamton and Kingston in New York, all saw large price increases, an indication of the strong demand for vacation homes and affordable homes during the ongoing pandemic.
“Although tourism took a major hit overall throughout 2020, our data shows that vacation housing still did well in terms of sales,” Yun added. “Many people purchased in these areas because they found themselves with new work-from-home freedoms.”
The national median existing single-family home price rose 14.9 percent on a year-over-year basis to $315,900. All regions experienced double-digit year-over-year price growth. The Northeast led this charge at 20.7 percent, followed by the West at 15.5 percent, the Midwest at 15.1 percent and the South at 14 percent.
Yun warned the large shifts in home prices could soon become detrimental to homebuyers.
“The average, working family is struggling to contend with home prices that are rising much faster than income,” he said. “This sidelines a consumer from becoming an actual buyer, causing them to miss out on accumulating wealth from homeownership.”
Yun acknowledged low mortgage rates are helping many buyers afford their monthly mortgage payments.