In the fourth quarter of 2023, the housing market saw a significant increase in single-family existing-home prices across various metro areas, with 86% of measured markets experiencing growth compared to the previous quarter. This surge in prices was accompanied by a national median single-family existing-home price rise of 3.5% from the previous year, reaching $391,700. Moreover, monthly mortgage payments for a typical existing single-family home with a 20% down payment increased by 10% compared to a year ago, reaching $2,163.

The housing affordability scenario slightly improved in the fourth quarter, primarily due to declining mortgage rates. However, this improvement didn’t alleviate the challenges faced by first-time buyers, who continued to grapple with limited inventory and escalating prices. Affordability concerns were evident, with families typically spending around 26.1% of their income on mortgage payments. Despite these challenges, optimism prevails for 2024, with expectations of increased homebuilding and lower mortgage rates potentially improving housing affordability and bringing more homes onto the market.

The top 10 metro areas with the largest year-over-year median price increases showcased significant gains, with some markets recording double-digit growth. Notably, eight of the top 10 most expensive markets were in California, reflecting ongoing trends in certain regions. Overall, while the housing market saw robust growth in prices, challenges remain for prospective buyers, particularly first-time buyers, underscoring the need for continued efforts to address affordability concerns and increase housing supply.