Personal Insurance Trends: What to Expect in 2025
The personal insurance market was fraught with challenges in 2024. Insureds faced difficulty in obtaining coverage, and premiums increased on property, auto, and excess liability policies. Severe weather events, inflation, a complex regulatory environment, fluctuations in reinsurance rates and terms contributed to the hard market, negatively impacting carrier profitability.1,2
Fortunately, 2025 brings good news for the personal insurance market. AM Best revised its outlook on U.S. personal lines from negative to stable. Rate and pricing conditions are expected to improve, particularly in the auto insurance space. Regulators are accommodating rate requests, investments yields are rising, and insurers are investing in technology. These factors have contributed to favorable conditions for 2025.3
Homeowners
If inflation remains low and severe weather events are limited, 2025 will bring a balanced home insurance market. Carriers re-entering the homeowners space should result in moderate rate hikes.4 To remain competitive, existing markets will need to become more flexible with their pricing and underwriting appetites.
Major home insurance companies will continue exiting U.S. states with severe weather events. Homeowners receiving offers of insurance may find they must complete resiliency action plans prior to policy issuance. Homeowners who cannot meet the requirements may be forced to place coverage through state-organized insurers.5
Dwelling coverage will be the focus in the homeowners space for 2025. According to LexisNexis’ 2024 Home Insurance Consumer Insights report, 70% of homeowners rely on their insurance company to ensure they have sufficient coverage.6 When inflation increases, so do rebuild costs. Premiums will increase as dwelling values are adjusted to appropriate rebuild values. Along with adjusting dwelling values, expect to see renewals with percentage-based deductibles even in areas that do not experience severe weather events.
Auto
Auto insurance rates are predicted to rise in 2025. Increased repair costs, claim frequency, and severe weather events are impacting rates. However, insurers are investing in new technology, which will bring better underwriting, claims handling and overall efficiency in 2025. AI-powered risk analysis models scan through large amounts of data to research prior claims and review social media to predict future behavior. Using AI technology will increase accuracy and efficiency in underwriting.7
Telematics, a technology that tracks driving behaviors, is transforming auto insurance. The technology monitors speed, braking patterns and mileage, allowing insurers to tailor premiums to individual driving habits. Safe drivers benefit from reduced premiums. Data-driven, usage-based insurance models appeal to drivers who are comfortable with technology, and simultaneously reduces loss ratios for insurers.8
Uninsured drivers are also impacting auto insurance. Many states require drivers to maintain a minimum amount of car insurance; however, the number of drivers who have no insurance has grown. Uninsured drivers increase the cost of auto insurance for everyone. As the number of uninsured drivers grows, the risk for insurance companies increases, which increases rates for all drivers.
Flood
In 2025, expect to see more emphasis on educating homeowners about the need for flood insurance. The focus will include non-coastal areas, which many homeowners consider safe from flooding. For example, Hurricane Helene caused severe flooding in western North Carolina, devastating communities. Less than 3% of properties in North Carolina have flood insurance.9
There is a common misconception that regular home insurance covers flooding, which is rarely the case. Homeowners education will therefore be at the forefront in 2025.
FEMA will obtain reinsurance on or about January 1, 2025, to be effective for one or more years. The reinsurance will partially indemnify FEMA in the event of large losses. The amount of reinsurance and the design of the reinsurance program will remain undisclosed until determined otherwise by FEMA.10
Cyber
The cyber insurance market will experience significant growth and standardization in 2025. As hacking events evolve, attackers’ financial incentives grow. Currently, cyber insurance policies vary in limits, features and coverages. This creates confusion for policyholders. In 2025, the industry may remove the variation in cyber risk insurance policies, and customized coverage will only remain for buyers who demand it.11
Source: USI
When To Lower the Price for a Quick and Profitable Sale
Learn when to lower the price on your house with expert tips on timing, market insights, and strategies to boost buyer interest and sell faster.
Selling a house can be a complex journey, often filled with uncertainties and tough decisions. One of the most critical aspects of this process is determining the right price for your home, especially because it can be difficult to not add some sentimental value to the price. But if you find that your home isn’t attracting the attention you hoped for, you may be wondering when it’s time to lower the price.
Understanding the Market
Before diving into the specifics of price adjustments, it’s essential to understand the real estate market. The housing market fluctuates based on various factors, including location, season, and economic conditions. Familiarizing yourself with these elements can help you make informed decisions about your listing price.
Local Market Conditions
Local market conditions can significantly influence your home’s selling price. Research comparable homes in your area, often referred to as “comps.” These homes should be similar in size, age, and features to yours. Pay attention to:
Days on Market (DOM): This indicates how long similar homes have been listed before selling. A high DOM can suggest overpricing.
Sale Prices: Compare the final sale prices of these homes to their initial listing prices. If homes are selling for significantly less than their listed price, it might indicate that buyers are not willing to pay the asking price for homes like yours.
Seasonal Trends
The real estate market tends to follow seasonal trends. Generally, spring and summer are the most active seasons for home sales, while fall and winter may see a slowdown. If your home is listed during a less active season, you may need to adjust your expectations and pricing accordingly.
Spring/Summer: These seasons often attract more buyers, as families prefer to move when school is out. Homes may sell faster and at higher prices.
Fall/Winter: With fewer buyers in the market, you might find it necessary to lower your price to attract interest.
Signs That You Need to Adjust Your Price
Recognizing the signs that it’s time to lower your asking price is crucial. Here are some indicators:
1. Lack of Showings
If your home is receiving little to no interest from potential buyers, it could be a sign that the price is too high. If you’re not getting showings after a reasonable time, it may be time to reassess your price.
2. Feedback from Showings
If you do have showings but receive consistent negative feedback about the price, it’s a clear indication that buyers may perceive your home as overpriced. Take note of specific comments regarding the price versus the home’s condition and features.
3. Length of Time on Market
How long has your house been on the market? If it’s been several weeks or even months without any offers, consider lowering the price. Generally, the longer a home sits unsold, the less attractive it becomes to buyers. A good rule of thumb is to reevaluate your price if your home has been on the market for over 30 days without serious interest.
4. Market Comparisons
Regularly compare your home to recently sold properties in your area. If similar homes are selling for less than your asking price, it’s time to rethink your pricing strategy. This will help you stay competitive in a fluctuating market.
5. Buyer Behavior
Pay attention to buyer behavior. If potential buyers are expressing interest but ultimately deciding to pass, they may be finding better value elsewhere. Track the feedback from agents and buyers to identify common concerns.
When to Lower Your Price
Knowing when to lower your house price is just as important as knowing how to do it. This means timing is crucial. Here are some timing strategies to consider:
After a Set Period
A common rule of thumb is to reevaluate your price after about 30 days on the market. If you’ve had minimal activity during this time, it might be wise to consider a price adjustment.
Immediate Feedback: If your home hasn’t generated interest, consider analyzing your marketing strategy alongside pricing. Sometimes the issue lies in how the home is being presented.
At the End of a Listing Period
If you’ve opted for a short-term listing agreement, such as 30 or 60 days, evaluate your home’s performance at the end of that period. If it hasn’t sold, consider lowering the price before renewing the listing. Discuss options with your agent to strategize the next steps.
During Seasonal Lulls
If you’re selling during a slower season, such as winter, it might be beneficial to lower your price to attract more interest. Conversely, if the market picks up, you may want to hold off on adjustments until you measure the buyer’s behavior.
What is the Best Day to Lower the Price?
While there’s no one-size-fits-all answer, research suggests that listings updated on Thursdays tend to perform better. By making price changes on this day, you increase the chances of attracting buyers over the weekend when showings typically peak.
Maximize Visibility: Ensure your new price is highlighted in online listings and marketing materials, and consider scheduling open houses shortly after the price change.
How Much Should You Lower Your Price?
Determining the right amount to reduce your price can be tricky. Here are some guidelines to help you decide:
1. Evaluate Local Comps
Look at the price reductions of similar homes in your area. A 5-10% decrease might be appropriate if your home is significantly overpriced compared to comps. This percentage helps maintain a competitive edge while also appealing to potential buyers.
2. Consider Your Motivation
Your motivation for selling can also influence how much you lower your price. If you need to sell quickly due to a job relocation or financial situation, a more substantial reduction may be necessary. Being realistic about your timeframe can guide your pricing strategy.
3. Don’t Go Too Low
While it’s essential to be competitive, offering too low of a price can raise red flags for buyers. A 10% reduction might be acceptable in a balanced market, but it could be perceived as desperate if the home is otherwise desirable. You want to find a price that reflects the home’s true value while still attracting interest.
What are the risks of waiting too long to lower my house price?
Waiting too long to lower your price can lead to your home becoming stale on the market, which can deter buyers. Homes that sit unsold for extended periods may develop a perception of being undesirable or overpriced, making it harder to attract offers in the future. Timely adjustments can help maintain interest and urgency among potential buyers.
Strategies for Effectively Lowering Your Price
When it comes time to lower your price, consider these strategies:
1. Communicate with Your Agent
Work closely with your real estate agent to determine the best approach for lowering your price. They can help craft a strategy that aligns with market conditions and buyer expectations. Your agent’s expertise is crucial in making informed decisions.
2. Update Your Listing
When you adjust your price, ensure that your listing reflects this change. Update your online listings and promotional materials to attract new interest. Highlight any new features or improvements made to the home since it was first listed.
3. Consider Bundling Incentives
In addition to lowering the price, consider offering incentives such as covering closing costs or including appliances in the sale. These additional perks can make your home more appealing to buyers and can help differentiate your property from others on the market.
4. Be Transparent
If you decide to lower your price, be transparent about it in your listings and communications with potential buyers. This honesty builds trust and can lead to more serious inquiries. Sharing the story behind the price reduction can also engage buyers and encourage them to take action.
Remember, the goal is to find a balance between achieving a fair price for your home and attracting potential buyers. With careful consideration and strategic planning, you can navigate the complexities of the real estate market and sell your home successfully.
Source: Home Shift Team: Marcio Vasconcelos
Will Home Prices Drop? Predictions for the 2025 Housing Market
The 2024 homebuying season was a tough one, leaving many hopeful buyers wondering if they’ll ever get an opportunity to purchase a home.
While a housing market crash remains unlikely and home prices probably won’t drop anytime soon, it is starting to look like it will get easier to buy a home soon.
How should borrowers expect the housing market to evolve in 2025? Let’s take a look at the latest predictions.
Overview of the 2024 housing market
Housing market activity has been relatively subdued this year thanks to high mortgage rates and limited inventory.
In November, the average 30-year mortgage rate was 6.56%, an increase from the previous month, according to Zillow data. Average home values are also up, increasing 2.6% year over year to $359,099 in October.
The good news is that rates are expected to ease this year, and home price growth should moderate.
Why are home prices so high?
Real estate is an appreciating asset, which means that home values typically increase over time. Though they do drop occasionally, like they did during the Great Recession, prices have historically trended up.
Home prices, like a lot of things, are driven by supply and demand. During the pandemic, demand for homes shot up as mortgage rates fell and buyers had more money to spend. As a result, prices started rising faster than normal.
Low supply only made affordability worse. Short-term trends may have played some part in this, since many sellers delayed listing their homes during the pandemic, either due to COVID concerns or out of a reluctance to enter a frenzied market as a buyer.
Together, these forces caused home prices to climb at an astonishing rate. Now that they’re so high, many are wondering if they’ll ever come back down. But because supply is chronically tight, any drops we might see would likely be relatively moderate.
Key trends shaping the housing market in 2024
Economic factors
The consumer price index, a key measure of inflation, peaked at 9.1% year over year in June 2022. This led the Federal Reserve to start aggressively raising the federal funds rate to bring inflation back down. High inflation and pressure from the Fed’s hikes helped push mortgage rates up, slowing home buying demand.
Fortunately, inflation has since cooled substantially, rising 2.6% year over year in October 2024. With inflation finally down near its target of 2%, the Fed has started lowering its benchmark rate.
Mortgage rates
Though mortgage rates are down from when they peaked near 8% in October 2023, they’re still higher than what many homeowners and buyers are used to. From 2010 until 2020, the average 30-year mortgage rate was 4.09%, according to Freddie Mac data. Then, during the pandemic, rates dropped even lower, reaching an all-time low of 2.65% in January 2021.
Because rates have been so high in recent years, many would-be buyers have refrained from entering the market. This has helped moderate the pace at which home prices rise, but it’s also kept sellers from listing their homes, since many have mortgages with low rates and are reluctant to give that up. This lock-in effect constrained housing supply and helped keep prices from falling, even as rates spiked.
Housing supply and demand
Low housing supply is a chronic problem in the U.S. And it’s a big part of why homeownership continues to get more expensive each year, even as demand has been sluggish.
Doug Duncan, Fannie Mae’s senior vice president and former chief economist, says most analysts believe the lack of supply has driven the dramatic price increases we’ve experienced over the past few years. From the start of 2020 to now, the average home price has grown by more than $100,000, according to Zillow data.
“Starting back in 2015, house prices since then have been appreciating at significantly faster than the long-term average,” Duncan says.
In its 2021 research note “Housing Supply: A Growing Deficit,” Freddie Mac estimated that the U.S. was 3.8 million units short of a healthy housing supply. The problem is especially pronounced when it comes to entry-level homes.
There are two main ways to add to the housing supply: listing existing homes for sale, and building new ones. Part of the problem is that the baby boomer generation is holding onto a lot of real estate, and they aren’t leaving their homes to live in retirement communities or assisted living facilities at the same rate previous generations have.
“Right now, the boomers are doing what they said they were going to do, which is aging in place,” Duncan says.
That’s not to say it’s a bad thing that older adults are able to remain independent for longer, often thanks to advances in technology and telehealth, but it cuts off a key source of inventory that isn’t added elsewhere. When younger adults sell their homes, for example, they’re typically also looking to buy another, increasing turnover, not supply.
The bigger problem is that new homes aren’t being constructed at a fast enough pace to meet demand. According to the Freddie Mac research note, “The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Duncan says that the Great Recession destroyed around 75% of the housing supply chain. During this time, nobody was building houses, so a lot of workers exited the industry, and many businesses shut down.
The supply chain is still recovering from this, and after decades of underbuilding entry-level homes, builders are having a hard time meeting demand for affordable inventory.
Predictions for 2025 housing market
Price trends: Will home prices drop in 2025?
Most major forecasts don’t expect home prices to drop in 2025. Here’s where some of the major industry players think home prices will end up by the end of the year:
Of course, it’s hard to say with certainty what will happen in the coming months and years. But based on what we know right now, it’s unlikely that home prices will drop soon.
Local housing market forecasts
The U.S. housing market is made up of a bunch of smaller, local markets that all have their own trends and influences. So even though home values are expected to rise overall throughout the next couple of years, it’s possible prices could ease slightly in your area. This is especially true in places where home prices boomed during COVID-19 and are due for a correction.
For example, home prices in Austin have been steadily declining since they peaked in mid-2022 and are now down 4.4% year over year, according to Zillow.
Is it a good time to buy a house?
So, is now a good time to buy a house? Duncan says that his answer to this question is the same now as it was 20 years ago: If it fits your budget, it’s the right time to buy.
“Because you don’t know whether interest rates are going to go up or down in the long term, and you’re simply making a housing decision, as opposed to an investment decision,” he says.
For most people, it’s not about trying to time the market.
“A lot of us are just buying a house to live in and take care of our household and family and all that,” Duncan says.
Many hopeful buyers are planning to wait for mortgage rates to go down before jumping into the market. While this will definitely make getting a mortgage more affordable, you could end up facing even higher home prices by the time mortgage rates come down.
One advantage to buying now is that you’ll avoid the inevitable increased competition and higher home prices that come with lower mortgage rates. Plus, you can save down the road by refinancing into a new mortgage once rates have dropped.
In fact, some lenders are even offering “buy now, refinance later” deals for those who buy when rates are high.
If you’re considering buying now, be sure to shop around and compare offers to find the best mortgage lender for you. By getting multiple quotes, you can ensure you get a good deal.
Will home prices drop FAQs
What are the main trends expected in the 2025 housing market? In 2025, housing market conditions should improve somewhat as rates go down and more people list their homes for sale.
What should buyers and sellers expect in the 2025 housing market? Homebuyers and sellers should face easier conditions in 2025, but affordability will likely remain a challenge since mortgage rates are only expected to go down a little bit and home prices will continue to rise.
When will home prices drop? Most experts don’t believe home prices will drop — though the pace of increases could start to slow in 2025. We’ll probably see prices increase modestly throughout the next couple of years.
Should I buy a house now or wait for a recession? You probably shouldn’t wait for a recession to buy a house. There’s no telling when a recession might happen, and if it does, it might not significantly impact home prices. Additionally, a recession could put you in a place where you can’t afford to buy a house, even if prices do come down.
Should I sell now or wait?Home prices are high now and they’re expected to continue rising, so whether you should sell now or later largely depends on how selling fits into your plans. Keep in mind that if you plan to buy another home, you’ll have to deal with today’s mortgage rates, which are still relatively high. But rates are expected to trend down next year.
Source: Business Insider: Molly Grace
How To Make Your House Sell Faster
Listen up, we’re here with our top 10 things to help get your house sold!
1. Value Add Improvements: Think kitchen updates, bathroom updates, fresh paint, and new appliances. Even quick changes like new cabinet hardware or bath fixtures can bring life to an otherwise dated space.
2. Curb Appeal: This is the invitation to come inside your home, and on MLS it means someone clicking your home to view more photos or scrolling past in many instances since this photo is often in the top three. So, spruce up the landscaping, spruce up the yard, add some potted plants, a welcome mat and wreath and welcome your potential future buyers in style.
3. Pre-Listing Inspection: Want to be one step ahead? Perform a pre-listing inspection and fix the items that come up on that report.
4. Professional Photos: In today’s age of digital marketing, it is imperative to pay for professional photos that showcase your home in the brightest light possible.
5. Stage Your Home: Organize, declutter, store personal items and create a neutral and minimal palette so that buyers can visualize themselves living in your home and going about their day. Bonus points for using a professional staging company like Hyer Home, who will ensure your space is swoon worthy.
6. Establish the Right Price: This piece is SO important, because the ‘days on market’ makes all the difference on how close to asking you might receive from potential buyers. And this is where a local expert, aka, Realtor comes in, so give us a call.
7. Find the Right Realtor: You want someone who can determine the distinct marketing advantage of your home, market it appropriately with professional photography and video, work well with other agents, negotiate on your behalf, and give their expertise in areas that will help maximize your return. A Realtor is vital and there’s simply no way around the value they provide sellers.
8. Deep Clean: Give your home that sparkly and shiny sheen.
9. Know Your Homebuyer: Understand what homebuyers are going to be looking for and how your property stands up.
10. Create a Home History File: Anything that can be helpful to tell the story of your home can be included like: appliance manuals, floor plan, maintenance schedule, community amenities/ membership, HOA information.
Source: Kelly Stradling, Realtor®, Smith Spencer Real Estate
House Pricing Mistakes to Avoid: Common Pitfalls and How to Prevent Them
Selling a house can be a daunting process, and setting the right price is one of the most critical aspects of ensuring a successful sale. Overpricing or underpricing your property can lead to prolonged time on the market or selling below its value. To help you navigate this challenging process, we’ve compiled a list of common house pricing mistakes and how to avoid them.
1. Overpricing the Property
One of the most common mistakes sellers make is overpricing their property. While it might seem logical to set a high price and leave room for negotiation, this strategy can backfire. Overpriced homes often sit on the market longer, leading to reduced interest and eventually requiring price reductions.
How to Avoid It
Research the Market: Study comparable homes in your area that have recently sold. Look at properties with similar features, size, and location to determine a realistic price range.
Consult a Real Estate Agent: A professional real estate agent can provide a comparative market analysis (CMA) to help you set a competitive price.
Be Objective: Avoid letting emotional attachment or personal investment in the home cloud your judgment. Focus on the market data and trends.
2. Ignoring Market Trends
Failing to consider current market conditions can lead to pricing mistakes. The real estate market fluctuates, and what was a fair price a few months ago might not be relevant today.
How to Avoid It
Stay Informed: Keep up-to-date with local and national real estate trends. Understand whether you are in a buyer’s or seller’s market.
Adjust Accordingly: Be willing to adjust your pricing strategy based on the latest market conditions. Flexibility can help you remain competitive.
3. Neglecting Home Presentation
Even if a house is priced correctly, poor presentation can deter potential buyers. Neglecting to stage or clean the home can make it less appealing, impacting buyers’ perceptions of its value.
How to Avoid It
Stage Your Home: Consider professional staging to highlight the best features of your home. Staging can make spaces look larger and more inviting.
Enhance Curb Appeal: First impressions matter. Ensure the exterior of your home is well-maintained, with a tidy lawn and appealing entrance.
Professional Photography: High-quality photos can make a significant difference in attracting buyers. Hire a professional photographer to capture your home at its best.
4. Skipping a Pre-Sale Inspection
Some sellers forego a pre-sale inspection to save money, but this can be a costly mistake. Unaddressed issues can lead to complications during the buyer’s inspection, potentially causing delays or renegotiations.
How to Avoid It
Invest in a Pre-Sale Inspection: Identify and address any issues before listing your home. This proactive approach can prevent surprises and give you a stronger negotiating position.
Make Necessary Repairs: Fix any major issues uncovered during the inspection. A well-maintained home can justify a higher asking price and attract more buyers.
5. Underestimating the Competition
Failing to consider the competition can lead to pricing errors. If similar homes in your area are priced lower, buyers will likely choose those over yours.
How to Avoid It
Analyze Competing Listings: Regularly review listings in your area. Understand what features and prices are attracting buyers.
Highlight Unique Features: If your home has unique or superior features, emphasize them in your listing to justify your price.
Stay Competitive: Be prepared to adjust your price or offer incentives to stay competitive with other listings.
6. Overlooking Seasonal Trends
Ignoring seasonal trends can impact your pricing strategy. For example, the real estate market is often more active in spring and summer, while winter can be slower.
How to Avoid It
Time Your Sale: If possible, plan to list your home during peak selling seasons to attract more buyers and potentially higher offers.
Adjust Pricing Accordingly: If you need to sell during a slower season, be more flexible with your pricing to accommodate reduced demand.
7. Not Accounting for Additional Costs
Sellers often focus solely on the listing price and overlook additional costs such as agent commissions, closing costs, and potential repairs.
How to Avoid It
Factor in All Costs: Calculate the total cost of selling your home, including agent fees, closing costs, and any repairs or upgrades.
Set a Realistic Net Price: Determine a net price that accounts for these costs, ensuring you achieve your financial goals without overpricing your home.
Conclusion
Avoiding common house pricing mistakes can significantly enhance your chances of a successful and timely sale. By researching the market, staying informed on trends, presenting your home effectively, and considering all costs, you can set a competitive price that attracts buyers and maximizes your return.
Source: OWN Real Estate: Wilson Leung
Price Gains Enrich Homeowners, Challenge Buyers
The average homeowner has accumulated nearly $150,000 in housing wealth over the last five years.
Homeowners continued to see their equity grow in the third quarter, with nearly 90% of major U.S. metro areas posting increases, the National Association of REALTORS® reported Thursday. Markets in the Midwest posted some of the largest gains last quarter, with metro areas like Racine, Wis., and Youngstown, Ohio, as well as four markets in Illinois, including Peoria and Springfield, even posting double-digit increases year over year.
A typical homeowner has accumulated $147,000 in housing wealth over the last five years, according to NAR’s newly released third-quarter housing report.
Home prices do appear to be slowing down slightly from their rapid gains in recent years, which could help to improve housing affordability for more home buyers. For example, in the second quarter, the national median home price had climbed nearly 5% year over year compared to 3.1% in the third quarter. The national median price for an existing single-family home was $418,700 in the third quarter, NAR reports.
Nearly 13% of markets—or 29 out of the 226 that NAR tracks—posted home price declines in the third quarter, up slightly from nearly 10% in the previous quarter.
Nevertheless, “home prices remain on solid ground as reflected by the vast number of markets experiencing gains,” says NAR Chief Economist Lawrence Yun. “Even with the rapid price appreciation over the last few years, the likelihood of a market crash is minimal. Distressed property sales and the number of people defaulting on mortgage payments are both at historic lows.”
Housing Affordability Improves Slightly
“Housing affordability has been a challenge, but the worst appears to be over,” Yun says. “Rising wages are outpacing home price increases. Despite some short-term swings, mortgage rates are set to stabilize below last year’s levels. More [housing] inventory is reaching the market and providing additional options for consumers.”
First-time home buyers have notably struggled in the housing market over the past year as they’ve faced higher home prices without the ability to tap into equity from a previous home sale. The market share for first-time buyers has shrunk to record lows, accounting for 24% of home sales (far from the typical 40% market share).
However, first-time buyers may be finding slightly better affordability conditions compared to previous quarters, NAR notes in its latest report. For a home valued at $355,900, with a 10% down payment loan, the monthly mortgage payment fell to $2,097 in the third quarter. That’s down 5.5% from the previous quarter, when it was $2,218.
Still, to succeed in today’s housing market, first-time home buyers are finding they may need more money. First-time buyers typically spent 38% of their family income on mortgage payments compared to other households that tend to devote 25% of their income to mortgage payments.
Top 10 Areas for Price Gains
The 10 markets with the highest price gains all posted double-digit increases last quarter. The following metro areas saw the largest year-over-year median price increases:
Racine, Wis.: 13.7%
Youngstown-Warren-Boardman, Ohio-Pa.: 13.1%
Syracuse, N.Y.: 13%
Peoria, Ill.: 12.4%
Springfield, Ill.: 12.3%
Burlington-South Burlington, Vt.: 11.7%
Shreveport-Bossier City, La.: 11.5%
Rockford, Ill.: 11.1%
Decatur, Ill.: 10.9%
Norwich-New London, Conn.: 10.6%
The Priciest Markets in the Nation
California, which is home to the most expensive markets in the nation, continues to be the leading state. The following were the most expensive housing markets in the U.S. as of the third quarter, according to NAR:
San Jose-Sunnyvale-Santa Clara, Calif.: $1.9 million, up 2.7% year-over-year
Anaheim-Santa Ana-Irvine, Calif.: $1.399 million, up 7.2%
San Francisco-Oakland-Hayward, Calif.: $1.309 million, up 0.7%
Honolulu, Hawaii: $1.138 million, up 7.2%
San Diego-Carlsbad, Calif.: $1.01 million, up 3.2%
Salinas, Calif.: $959,800, up 1.5%
San Luis Obispo-Paso Robles, Calif.: $949,800, up 6.7%
Los Angeles-Long Beach-Glendale, Calif.: $947,500, up 5.6%
Oxnard-Thousand Oaks-Ventura, Calif.: $947,400, up 2.8%
Boulder, Colo.: $832,200, down 3%
Source: REALTOR® Magazine, Melissa Dittmann Tracey