Median existing single-family home price rose 10.0 percent in the fourth quarter of 2012 year-over-year, the strongest yearly increase for home prices since the fourth quarter of 2005, according to the National Association of Realtors.
That’s up from an 8.8 percent yearly increase in the third quarter, and brings the median home price up to $178,900. Lawrence Yun, NAR’s chief economist, said a number of factors are at play in housing’s strong performance.
“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” he said. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”
Nancy Finley, an agent with Keller Williams Realty on Chicago’s North Side, said that low housing inventory played a huge role in Chicago’s real estate market in 2012’s fourth quarter, when median prices in the city for attached homes rose 13.5, 11.9 and 28.8 percent in October, November and December, respectively.
“It’s an absolute direct point-to-point link to lack of housing inventory,” Finley said. “At the moment, there’s a huge shortage of inventory.”
Also, as our infographic below demonstrates, NAR found that more and more metropolitan markets have shown price increases as the real estate market has recovered. Highlight the graph with your cursor to see how many metro markets saw their home prices rise last year!