The median price for a single family home rose to $186,100 in the third quarter of 2012, a 7.6 percent increase over the median price of $173,000 in 2011 according to the National Association of Realtors®(NAR)
Encouraged by low mortgage interest rates, reduced inventory and rising prices, home sales in 2012 are notably higher than in the past 4 years “Of course the recovery would be stronger and more stable if we could return to safe but sensible mortgage underwriting standards,” says the NAR.
Some of the price gain is due to a smaller share of distressed home sales in the market, but the higher prices significantly reflect a market recovery. It’s a simple matter of supply and demand. The inventory of quality homes on the market is shrinking. First Home Buyers and Move–Up buyers are paying closer to the asking price because there aren’t a lot of other options on the market.
The NAR expects this trend to continue into 2013. They caution that “there is a risk of price acceleration if builders are unable to increase supply to meet the needs of our growing population and households.”
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