Home Prices Grow 3.7% in Second Quarter

Home prices continued to slow during the second quarter for most metro areas in the US.

Price gains fell into the single digits in many areas. The national median price for an existing single-family home was $227,500 for the quarter, an increase of 3.7% from $219,400 for the year.

The median price is not the average home price, it is the point where half of the homes sell for more and half sell for less.

One-hundred and fifty-one metro areas were covered in the report by the National Association of Realtors. The report saw 37 areas with double-digit annual increases and 26 metro areas with minor price declines.

The majority of the markets showed declines also experienced a weakening local labor market.

With more sellers competing for the pool of buyers, the pressure on home prices has evaporated in most metro areas, said David Lereah, NAR's chief economist.

Metro area condominiums and co-op prices in 57 markets had a national median existing condo price of $225,800 for the second quarter -- a 0.3% decrease from one year ago.

Fifteen metros had double-digit annual gains in condo price, while 14 areas experienced declines.

Buyers generally have more choices in the condo market, so prices in many areas are fairly flat, said NAR President Thomas M. Stevens.

Speculators have left the market, meaning most buyers in the market today -- both single-family and condo -- are serious buyers who plan to stay in their homes as a long-term investment. Over the long haul, housing is the most solid investment that most people make.

The largest leap in single-family home price increases occured in Baton Rouge, Louisiana, where the quarterly median home price was $172,300. This was a 27.3% increase over the second quarter of 2005.

Median single-family home prices ranged from $65,200 in Danville, Illinois to $751,900 in the San Francisco/Oakland/Fremont area.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!