Most metros still seeing annual price gains 

Home prices rose in major cities across the U.S., with single-family home values increasing 4% year-over-year in most large metro areas according to the Q4 metro home price report from the National Association of Realtors.

Nearly nine out of 10 metro areas saw annual home prices rise in the last quarter of 2022, but the pace of increases was down from the third quarter of 2022, when the year-over-year price gain was 8.6%. Among the findings in the quarterly report:

• Single-family home prices went up in 166 of the 186 metropolitan areas NAR tracks. In 11% of the markets, home prices fell.

• The top 10 metro areas with the largest year-over-year price gains included four markets in Florida and three in the Carolinas. 

• The national median price for a single family home rose to $378,700, a 4% gain over the previous year.

• Monthly mortgage payments for a typical single-family home with a 20% down payment jumped 58% to $1,969, NAR reported.

"A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years," NAR chief economist Lawrence Yun said, noting there are signs that buyers are returning to the market as mortgage prices moderate.

But housing affordability continues to be a problem across the U.S., especially for first-time buyers. Yun said a typical starter home costs $321,900. With a 10% down payment, the monthly mortgage cost rose to $1,931, about 7% more than the previous quarter. New homeowners are paying $700 more for home loans than a year ago, NAR said.

The National Association of Home Builders also pointed to affordability concerns in their recent Housing Opportunity Index, which found that affordability hit record lows in the fourth quarter of 2022. The index determined just 38.1% of the new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $90,000.

"Rising mortgage rates, supply chain disruptions, elevated construction costs, and a lack of skilled workers and lots all contributed to a declining housing market and worsening affordability conditions going back to the second quarter of last year," said NAHB Chairperson Alicia Huey.

Sales booming in the South, biggest price gains in the Northeast

The South had the largest share of single-family existing-home sales at 45%, with year-over-year price appreciation of 4.9%, NAR said. 

In the Northeast, prices were up 5.3%. In the Midwest, the increase was 4%, and in the West, sale prices rose just 2.6%.

The following are the top 10 metro areas with the biggest year-over-year price increases in single-family home sales:

• Farmington, NM: 20.3%

• North Port-Sarasota-Bradenton, FL: 19.5%

• Naples-Immokalee-Marco Island, FL: 17.2%

• Greensboro-High Point, NC: 17.0% 

• Myrtle Beach-Conway-North Myrtle Beach, SC-NC: 16.2%

• Oshkosh-Neenah, WI: 16.0%

• Winston-Salem, NC: 15.7%

• El Paso, TX: 15.2%

• Punta Gorda, FL: 15.2%

• Deltona-Daytona Beach-Ormond Beach, FL: 14.5%.

Home prices dropped in parts of California

NAR noted housing markets in the West continued to command the highest home prices, and that half of the top 10 most expensive markets were in California. But the median home price dropped in metro areas comprising San Francisco (down 6.1%), San Jose (down 5.8%) and Anaheim (down 1.6%). The median home prices in all of those markets still tops $1 million.

"A few markets may see double-digit price drops, especially some of the more expensive parts of the country which have also seen weaker employment and higher instances of residents moving to other areas," Yun predicted.