According to Realtor.com May housing data, median list prices have grown 37.5% from May 2019, yet inventory has decreased 34.2% compared to normal 2017 to 2019 levels, indicating that the market remains seller-friendly.
“In addition to higher median list prices and fewer homes for sale versus 2019, the increase in median price-per-square foot suggests that the typical home on the market today is worth 52.7% more than before the pandemic, more than double the roughly 23% increase in consumer price inflation in this period.” said Danielle Hale, Chief Economist, Realtor.com. “The specifics will vary from market to market, but the data suggest ongoing opportunity for many sellers. Though with mortgage rates still much higher than many existing homeowners enjoy, this opportunity favors sellers who don’t have to replace a mortgage, such as investors or second homeowners looking for an exit, or equity-rich homeowners looking to downsize in their current area or to a lower-cost region, as well as those planning to rent their next home.”
The median price of properties for sale in May remained largely steady, rising from $441,000 last year to $442,500 this year, an increase of 0.3%. However, a closer look at median price-per-square foot, which may be used to better estimate property worth, shows a 3.8% increase. The discrepancy between the percent change in median listing price and the median price-per-square foot demonstrates that, during this time period, the inventory of smaller and more inexpensive homes has increased, which helps to keep the median price low even while per-square-foot prices rise more. When compared to pre-pandemic levels, median prices per square foot across the country increased dramatically.
Since 2019, nearly half of the 50 metros included in the analysis have seen an increase in median price-per-square foot of at least 50%, with New York (84.7%), Boston (72.9%), and Nashville, TN (68.6%) witnessing the most significant changes.
Metros with Highest Increase in Median List Price-Per-Sq. Ft. Compared to May 2019
- New York-Newark-Jersey City, NY-NJ-PA – 84.7%
- Boston-Cambridge-Newton, MA-NH – 72.9%
- Nashville-Davidson-Murfreesboro-Franklin, TN – 68.6%
- Tampa-St. Petersburg-Clearwater, FL – 68.0%
- San Diego-Chula Vista-Carlsbad, CA – 65.7%
- Austin-Round Rock-Georgetown, Texas – 64.7%
- Memphis, TN-MS-AR – 64.2%
- Riverside-San Bernardino-Ontario, CA – 62.7%
- Washington-Arlington-Alexandria, DC-VA-MD-WV – 61.3%
- Hartford-East Hartford-Middletown, CT 57.7%
Income Required to Purchase a Home Continues to Rise
The increase in median price per square foot between May 2019 and now can be viewed positively by sellers, especially with the 52.7% growth, which means that the median home on the market is worth far more today than it was before the epidemic. However, for buyers, the increase may mean being priced out of particular homes if their household income does not grow at the same or greater rate, especially when increased mortgage rates are included in.
The average monthly mortgage payment for the median property increased by approximately $158 in May compared to the previous year. This boosted the required household income to purchase the median-priced home by $6,400, to $119,700, after accounting for taxes and insurance.
For the seventh consecutive month, the number of properties actively for sale increased by 35.2% in May 2024 compared to the same period last year. A few metros witnessed significant increases in active listings year-over-year, notably Tampa (87.4%), Phoenix (80.3%), and Orlando, FL (78.0%). A closer look at the mix of homes for sale reveals a 46.6% increase in homes priced between $200,000 and $350,000 across the country year on year, surpassing last month’s high of 41.0%, indicating that affordable homes are still entering the market—which is good news for prospective buyers.
To read the full nreport, including more data, charts, and methodology, click here.
