US home prices soar 23%, the fastest rate on record

Washington

HOME prices in the United States rose the most on record in the second quarter as buyers battled for a scarcity of listings.

The median price of an existing single-family home jumped 23 per cent from a year earlier to an all-time high of US$357,900, the National Association of Realtors (NAR) said in a report on Thursday.

About 94 per cent of 183 metropolitan areas measured had double-digit gains, up from 89 per cent in the first quarter.

Low mortgage rates have stoked the hot US housing market for more than a year, with a shortage of inventory pushing prices ever higher.

Buyers are having a hard time finding properties they can afford: Sales of previously owned homes in the US fell for a fourth straight month in May.

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"Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year, but are unlikely to be repeated in 2022," NAR chief economist Lawrence Yun said in the report. "There are signs of more supply reaching the market and some tapering of demand."

The north-east region led gains, with a 22 per cent rise. Among metro areas, values rose the most in Pittsfield, a Western Massachusetts town about 60km from Albany, New York.

The median price there was US$321,900, up 47 per cent from a year earlier. It was one of 12 areas nationwide with increases of more than 30 per cent.

The only metro area with a decrease was Springfield, Illinois, where prices fell 7 per cent.

The price increases have hit particularly hard for renters looking to become homeowners.

Among first-time buyers, the monthly mortgage payment for a loan with 10 per cent down jumped to 25 per cent of income in the second quarter, up from 21 per cent a year earlier, according to the report.

"Housing affordability for first-time buyers is weakening," Mr Yun said. "Unfortunately, the benefits of historically low interest rates are overwhelmed by home prices rising too fast." BLOOMBERG