The median U.S. home price headed higher in the third quarter, reversing direction from the first half of the year, but wide variations were reported across markets, the National Association of Realtors reported.
Approximately 82% of 221 metropolitan areas measured by the trade group saw higher sales prices of single-family residences compared to third quarter 2022. The share jumped upward from 60% in the second quarter. Twenty-five markets, or 11%, registered third-quarter increases of 10% or more.
The nationwide median ticked up 2.2% on an annual basis to $406,900 from $398,100 after recording declines of 2.4% and 0.2% the prior two quarters.
"Following the big price changes during the last several years, it's natural to witness momentary swings in prices," said NAR Chief Economist Lawrence Yun in a press release. "Some markets that experienced sizable home price gains since 2020 have turned lower, resulting in temporary relief for prospective home buyers. Also, a few markets in the West that experienced price declines in the prior quarter have seen prices rise again."
But the third-quarter uptick could reflect volatility in the housing market over the past few years as much as current housing demand, according to CoreLogic. The real estate data provider similarly found home prices rising throughout the summer, but following the release of its September Home Price Index, Chief Economist Selma Hepp said more recent upward movement "mostly reflects a comparison with last year's lows, when prices began to cool from double-digit growth in autumn 2022."
Every geographic region saw their median sale price rise in NAR's quarterly report. Home values grew the most in the Northeast and Midwest, jumping up 5.3% and 5.2% year over year to $467,700 and $304,900, respectively. Midwest communities accounted for six of the 10 metro areas with the greatest price growth of at least 12.6%.
In the South, which had the largest share of home sales in the country, prices appreciated by 1.7% compared to a year ago to $369,300. Prices out West, which surged during the pandemic before seeing the largest pullbacks in the country earlier this year, went back up by 0.6% to a median of $623,100.
But some cities where prices accelerated the most between 2020 and 2022 saw home values go in reverse during the third quarter, with a 10.3% drop in Austin, Texas. In Phoenix, the median price fell by 1.5, while in Salt Lake City, it was down 1.2%. Two other Texas cities, Dallas and Houston, registered declines of 1.1%.
On the opposite end, though, other large cities, notably in California, saw median prices surge. Third-quarter medians jumped 9.6% annually in San Jose and 8.7% in both Anaheim and San Diego. In Boston, the price increased by 6.6%, and in Miami, by 5.7%.
San Jose and Anaheim also ranked as the country's most expensive housing markets, where median homes sold for $1.85 million and $1.31 million. They were followed by the San Francisco-Oakland metropolitan area at $1.3 million.
Aspiring buyers will likely struggle to find affordable opportunities without any sort of relief, according to Yun.
"Congress must consider incentives to boost housing supply and inventory so that more Americans can participate in wealth accumulation. The housing market shouldn't be accessible only to those who are paying in cash nor become a playground for the wealthy," he said, while adding the Federal Reserve needed to bring interest rates down.
First-time buyers in the third-quarter needed to spend 40.4% of their family income on mortgage payments, up from 38.2% three months earlier, NAR determined. The trade group considers any amount more than 25% as unaffordable.
The monthly amount needed to afford a starter home of $345,900 based on 10% down payment increased 19% from a year ago to $2,149, NAR said.
