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Low Rates No Longer Offsetting Price Gains; Affordability Wanes
Friday, November 13, 2020
The National Association of Realtors®
(NAR) said on Thursday that home prices have continued to grow in each of the
181 areas it tracks for its quarterly metro home price report. Both record-low
mortgage rates and depleted inventories of existing homes for sale contributed
to the annual growth. "Favorable mortgage rates will
continue to bring fresh buyers to the market," said Lawrence Yun, NAR chief
economist. "However, the affordability situation will not improve even with low
interest rates because housing prices are increasing much too fast." Percentage price gains reached into
the double digits in 65 percent or 117 of the areas. In comparison, only 15
metro areas recorded double-digit increases in 2020's second quarter. The
biggest gainers in the third quarter were Bridgeport, Connecticut, (27.3
percent); Crestview, Florida. (27.1 percent); Pittsfield, Mass. (26.9 percent);
Kingston, New York. (21.5 percent); Atlantic City, New Jersey (21.5 percent).
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