Home prices show strongest growth in 7 years

NAR: Nearly 9 out of 10 metro areas posted annual gains in Q4

The median home price nationwide saw its biggest jump in seven years last quarter as for-sale inventory hit its lowest level in 12 years, according to a quarterly reportfrom the National Association of Realtors.

Of 152 metro areas, 133 (87.5 percent) saw their median sales prices rise year over year in fourth-quarter 2012 compared with 120 in the third quarter and only 29 in fourth-quarter 2011.

Nationally, the median sales price jumped 10 percent on an annual basis, to $178,900 — the strongest annual price increase since fourth-quarter 2005 when the median rose 13.6 percent, NAR said.

"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," said Lawrence Yun, NAR's chief economist, in a statement. 

"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," Yun said.

More housing construction is needed to relieve some of the pressure in the market and keep home prices from overheating, Yun added.

BY INMAN NEWS, MONDAY, FEBRUARY 11, 2013.