Median U.S. home price exceeds $400K for 1st time, report finds

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A "for sale by owner" sign stands outside a home. (Daniel Acker/Bloomberg via Getty Images)

WASHINGTON - Potential buyers looking to purchase an affordable home may face bigger obstacles based on the latest quarterly report from the National Association of Realtors (NAR).

Data from the report finds that the median cost of a single-family existing home jumped 14.2% year-over-year to $413,000 in the second quarter of 2022. Median prices for a home surpassed $400,000 for the first time on record since the NAR began tracking housing data.

Housing affordability dropped substantially in the second quarter based on high mortgage rates and expensive home prices. The NAR says that a monthly mortgage payment on a single-family home with a 20% down payment soared to $1,841 with families spending nearly 25% of their income on mortgage payments.

According to the NAR, first-time homebuyers spent nearly 40% of their family income on mortgage payments in the second quarter, a staggering increase from 28.7% in the previous quarter

Mortgages are deemed expensive if the monthly payment, including principal and interest, is more than 25% of the family’s income, the NAR explains.

In 53 housing markets, a family would need at least $100,000 to afford a 10% down payment for a mortgage, nearly double compared to 27 housing markets from the previous quarter.

"Home prices have increased at a pace that far exceeds wage gains, especially for low- and middle-income workers," NAR Chief Economist Lawrence Yun said in a statement. "Overall, the national price deceleration inevitably followed the softening sales, providing well-positioned prospective buyers a small measure of welcomed relief. The recent dips in mortgage rates will bring additional buyers to market, especially in those places where home prices are still relatively affordable and where jobs are being added."

What’s driving the housing price increase?

Nearly every community in the U.S. is feeling the effects of an overvalued housing market particularly in smaller cities where homebuyers were looking for new homes during the pandemic.

Data provided to FOX Television Stations by Moody’s Analytics in May shows homes in 97% of U.S. metro areas are overpriced, with the most overvalued markets seeing homes priced at 50% to 70% more than they’re worth.

Surges in housing prices are also linked to limited inventory, multiple offers on properties, houses selling for well over the asking price (sometimes by hundreds of thousands of dollars), and home renovations taking longer based on low supply.

The largest year-over-year price gains.

Cities with the highest housing price increases

Ten cities have the largest spike in housing prices for the second quarter exceeding 25%. Seven of those housing markets are in Florida, according to the NAR.

Fayetteville-Springdale-Rogers, Arkansas: 31.9%
Lakeland-Winter Haven, Florida: 31.4%
Naples-Immokalee-Marco Island, Florida: 28.9%
North Port-Sarasota-Bradenton, Florida: 28.8%
Myrtle-Beach-Conway-North Myrtle Beach, South Carolina and North Carolina: 28.5%
Tampa-St. Petersburg-Clearwater, Florida: 28.0%
Cape Coral-Fort Meyers, Florida: 27.8%
Punta Gorda, Florida: 27.4%
Ocala, Florida: 26.7%
Ogden-Clearfield, Utah: 25.5%

The NAR released a list of the most expensive housing markets in the nation. Locales in California make up half the list based on housing prices.

The 10 most expensive housing markets

Top 10 most expensive housing markets in the U.S.

San-Jose-Sunnyvale, Santa Clara, California: $1,900,000
San Francisco-Oakland-Hayward, California: $1,550,000
Anaheim-Santa Ana-Irvine, California: $1,300,000
Honolulu, Hawaii: $1,145,000
San Diego-Carlsbad, California: $965,900
Boulder, Colorado: $933,400
Naples-Immokalee-Marco Island, Florida: $850,000
Seattle-Tacoma-Bellevue, Washington: $818,900
Boston-Cambridge-Newton, Massachusetts-New Hampshire: $722,200

FOX 5 New York and FOX 2 Detroit contributed to this story. This story was reported from Washington, D.C.