The city is a highly desirable place to live in for Americans who work there or generally like to be where the action is, more so than in rural locales, which wasn't always the case. Proof positive of the surging demand is the pace at which home prices are climbing, despite sales slowing somewhat as of late, according to a recent real estate purchase report.
In 81 percent of metropolitan statistical areas, median existing single-family home prices rose in 2015's fourth quarter, based on the most recent quarterly sales update released by the National Association of Realtors, or what translates to 145 of out 179 MSAs measured. Meanwhile, only 34 MSAs saw median prices lower than the same three-month period last year.
Prices up by double-digits in 17 percent of MSAs
Not only did the vast majority of MSAs record price increases, but several did by double digits, according to NAR's findings. For instance 30 metros saw values rise by 10 percent or more, up from 20 between July and September and 22 during the corresponding period in 2014.
Lawrence Yun, NAR chief economist, indicated that the dearth of inventory, combined with desirability, is sending prices through the roof.
"Even with slightly cooling demand, the unshakeable trend of inadequate supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices in several metro areas," Yun said. "As a result, homeownership continues to be out of reach for a number of qualified buyers in the top job producing, but costliest, parts of the country especially on the West Coast and parts of the South."
He added that without more groundbreaking activity among construction firms, there's no knowing when prices will finally begin to attenuate.
What residential properties are going for today has risen substantially over a relatively short period. In the fourth quarter, the national median was $222,700. In the immediately previous quarter last year, the median was $208,400.
Houses more affordable in East, Midwest
There are those places, however, where prospective home buyers can purchase a residence for less than six figures. Four of the five lowest-priced metros during the fourth quarter were all in the eastern two-thirds of the country, including Ohio, Maryland and Illinois. In Rockford, Ill., the median was $87,600, according to NAR's estimates.
Meanwhile, the highest-cost MSAs were in the West, specifically Hawaii and California. The most expensive MSA was San Jose, commanding a price tag of $940,000.
While prices seem to be on an interminable rise, mortgage rates are going in the other direction – in spite of the Federal Reserve's predictions to the contrary. For the sixth straight week, 30-year fixed-rate loans averaged 3.6 percent for the second week in February, according to Freddie Mac's Primary Mortgage Market Survey. That's only slightly above where fixed-rate mortgages bottomed out at in 2015.
"This week's drop leaves the mortgage rate just 6 basis points above last year's low of 3.5 percent," said Sean Becketti, Freddie Mac chief economist.