Home-price growth accelerated in much of the U.S. in the fourth quarter as low mortgage rates and improving employment spurred demand.
The median price of an existing single-family home rose from a year earlier in 86% of the 175 metropolitan areas measured, the National Association of Realtors said in a report Wednesday. Twenty-four areas had price gains of 10% or more, up from 16 regions in the third quarter. Prices declined in 24 areas.
A stronger job market and mortgage rates at close to historic lows contributed to faster appreciation at a time when inventory is limited, Lawrence Yun, chief economist for the Realtors group, said in a statement. The price gains are reducing affordability in areas across the U.S., which had 25% growth on average over the past three years.
“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” Yun said.
At the end of the fourth quarter, there were 1.85 million previously owned homes listed for sale, down from 2.01 million a year earlier.
The number of markets with price gains in the fourth quarter is up from the previous three-month period, when 73% of the regions measured had increases, the Realtors group said.
The median price for an existing single-family home in the three months through December was $208,700, up 6% from the fourth quarter of 2013, according to the report.