The median home price in Silicon Valley exceeded $2 million in the second quarter – the first time a metropolitan area in the U.S. has crossed that threshold. Eight of the 11 most expensive places in the country to buy a home were in California.
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According to calculations by the National Association of Realtors, the price of an existing single-family home in the San Jose-Sunnyvale-Santa Clara area rose 12% year-over-year to $2.08 million in the second quarter. In no other metropolitan area in the country had prices previously risen above $2 million, the group said.
Neighboring San Francisco ranks second among the most expensive U.S. cities. The median house price rose by 9% to $1.45 million last year. The other six California cities in the top 11…
No. 3 Orange County: $1.44 million – an increase of 15% within a year.
No. 5 San Diego: $1.05 million – an increase of 11% within a year.
No. 6 Salinas: $1.04 million – an increase of 13% within a year.
No. 7 Ventura County: $927,900 – an increase of 3% within a year.
No. 8 San Luis Obispo: $895,300 – an increase of 1% within a year.
No. 11 Los Angeles: $854,800 – an increase of 8% in one year.
The sharp rise in home prices in the Golden State reflects a broader affordability issue. Across the U.S., prices for existing single-family homes rose 4.9 percent to $422,100 in the second quarter, compared with a 5 percent year-over-year increase in the same period last year.
Nationwide, 89 percent of metropolitan areas saw home prices rise in the second quarter. The interest rate for a 30-year fixed-rate mortgage ranged from 6.82 percent to 7.22 percent during this period.
In 48 percent of U.S. markets, an income of at least $100,000 is required to afford a mortgage with a 10 percent down payment, NAR data shows. In the first quarter, that was the case in 40.7 percent of U.S. markets.
“This is great news for homeowners who are just beginning to grow their wealth,” said Lawrence Yun, NAR chief economist, in a statement. “However, it’s difficult for those looking to buy a home, as the income required to qualify has roughly doubled from a few years ago.”
Typical payment
The typical mortgage payment was $2,262 a month, about 11 percent more than in the first quarter. In the second quarter, families typically spent 26.5 percent of their income on mortgage payments, compared to 24.2 percent in the previous three-month period.
Some surprising markets topped the list of NAR areas with the largest annual percentage increases. Racine, Wisconsin and Glens Falls, New York both saw home prices increase 19.8% year over year in the second quarter. However, the mix of homes sold affects the numbers, according to the NAR.
Meanwhile, price growth has moderated in some housing markets that had previously experienced strong growth. In Austin, home prices were flat in the second quarter, while in Nashville they matched the national average price increase of 4.9%.
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