By Prashant Gopal Bloomberg News
BOSTON — Prices for single-family homes increased in 89 percent of U.S. cities in the first quarter as the housing market extends a recovery from a five-year slump.
The median sales price rose from a year earlier in 133 of 150 metropolitan areas measured, the National Association of Realtors said in a report Thursday. A year earlier, 74 areas had gains.
Buyers returning to the housing market are bidding up prices for a tight supply of listings. The national median price for an existing single-family home was $176,600 in the first quarter, up 11.3 percent from the same period last year. That was the biggest gain since the fourth quarter of 2005, according to the Realtors group.
“Some of the previously hard-hit markets like Phoenix, Sacramento and Miami continue to experience a dramatic turnaround, while a new set of areas like Atlanta, Minneapolis and Seattle have begun to show strong signs of upward momentum,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report.
At the end of the first quarter, 1.93 million previously owned homes were available for sale, 16.8 percent fewer than a year earlier, according to the Realtors group.
The best-performing metro areas were Akron, Ohio, and San Francisco, where prices jumped 33 percent from a year earlier. Prices rose 32 percent in Reno, Nevada, and Silicon Valley, California; 31 percent in Atlanta and 30 percent in Phoenix.
The Kankakee, Ill., area had the biggest decline, falling 19 percent from a year earlier. Following were Edison, New Jersey, with a 8.6 percent drop, and Allentown, Pa., with a 8.3 percent decrease.
The housing recovery is strengthening as the job market improves and the Federal Reserve pushes down borrowing costs for mortgages to near record lows. The unemployment rate fell to a four-year low of 7.5 percent in April, according to Labor Department data, and the number of Americans filing claims for jobless benefits unexpectedly dropped last week to the lowest level in more than five years.
Prices in some of the areas hardest hit by the housing crash are also rising as institutional investors, led by Blackstone Group LP, have stepped up purchases of properties to build rental businesses. Some of the firms have been accessing Wall Street for funding and selling shares to the public.
American Residential Properties Inc. raised $287.7 million yesterday in an initial public offering, after Silver Bay Realty Trust Corp. in December became the first publicly traded single- family rental company. American Residential fell 1 percent to $20.80 at 12:23 p.m. in New York.