Last year ended with a jump in home prices, according to the Q4 2017 report from the National Association of REALTORS (NAR). In Q4 2016, the national median single-family home price was $235,400, and in Q4 2017 it jumped to $247,800, a 5.3 percent year-over-year increase.
As home prices increased, so have sales, according to NAR. Existing home sales went up 4.3 percent to a seasonally adjusted annual rate of 5.62 million in Q4 2017 from Q3, and 1.3 percent higher than the 5.55 million pace during Q4 2016. NAR notes that this increase in home sales forced housing inventory to an all-time low.
"A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately ended up putting even more strain on inventory levels and prices," said NAR Chief Economist Lawrence Yun. "Remarkably, home prices have risen a cumulative 48 percent since 2011, yet during this same timeframe, incomes are up only 15 percent. In the West region, where very healthy labor markets are driving demand, the gap is even wider."
NAR also notes that the national family median income rose in Q4 2017, but the combination of rising prices and mortgage rates have still kept many buyers out of the market.
“While tight supply is expected to keep home prices on an upward trajectory in most metro areas in 2018, both the uptick in mortgage rates and the impact of the new tax law on some high-cost markets could cause price growth to moderate nationally," said Yun. "In areas where homebuilding has severely lagged job creation in recent years, it's going to be a slow slog before there's enough new construction to cool price appreciation to a pace that aligns more closely with incomes."
NAR will release its Existing-Home Sales report for January on February 21.