San Jose, Calif. is the first city where the price of a typical home is greater than $1 million, according to data released yesterday by the National Association of Relators.
The median home in San Jose is now $1,085,000—$199,400 higher than the average price of $885,600 in San Francisco, a city where homes are notorious for their high prices.
Home prices rose in 83% of cities across the U.S. in the second quarter, representing a 4% decline from the first quarter when 87% of metro areas reported price increases, according to the data.
The NAR reported that 25 out of 178 cities in the report saw double-digit price increases—a slight decline from the 28 metro areas in the first quarter. Comparatively, 34 cities experienced double-digit price gains in the same period last year. The decrease within the past year shows that the housing market may be starting to cool.
Regardless, home prices still hit record highs in the second quarter. According to the NAR, the national median home prices was $240,700, which is up 4.9% from the second quarter of last year. Price increases are mainly driven by the housing market in the Pacific Northwest and California.
National family median incomes have seen a slight increase, and the nation is seeing the lowest mortgage rates in three years. But the two have done little to improve affordability for average families, the NAR reports. A buyer making a 5% down payment would need an income of $52,255 to purchase a single-family home at the national median price.
“Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities,” said Lawrence Yun, NAR chief economist. “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.”
Aside from San Jose, San Francisco, Anaheim-Santa Ana, Calif., Urban Honolulu, Hawaii, and San Diego rounded out the five most expensive housing markets in the second quarter.