Median existing home prices
With the rise in existing home sales, the median prices of homes in all regions also experienced a sharp rise in December 2015. In this article, we’ll ponder over median home price trends at the national level as well as in the regional markets.
Sharp rise in median home prices
At the national level, the median existing home price for all housing types in December 2015 was up by 7.6% YoY (year-over-year) to $224,000. This was the 46th consecutive month of YoY increases in median home prices. Median home prices rose 6.7% in 2015.
The rise in home prices would make houses further unaffordable for homebuyers, especially for first time buyers. On the other hand, the rise in prices bodes well for homeowners, as it increases their wealth and could encourage them to put their houses up for sale, thus boosting home inventory to some extent.
Prices in the West region soar
The median prices in the West region soared by 8.2% to $321,000. This was the highest median price in the West region since July 2015. In the Midwest region, median home prices jumped 7.5% to $171,000, while in the South region prices rose by 6.8% to $196,000. The Northeast region reported the lowest growth of 5.3% to $256,000 in December 2015.
Rising home prices to benefit homebuilders
The strong rise in median home prices bodes well for homebuilders such as D.R. Horton (DHI) and KB Homes (KBH), which have strong presences in the Midwest region. A surge in home prices in the Northeast region is beneficial to PullteGroup (PHM) and Toll Brothers (TOL). The iShares US Home Construction ETF (ITB) has 12.2% exposure to DHI.
In the next part of the series, we’ll discuss the existing housing inventory in December 2015.