According to a report from the National Association of Realtors (NAR), a New Mexico metro area has ranked in the top 10 for home price gains in the first quarter of the year.
The Santa Fe metro area saw a large 11.7 percent jump in single-family home values, with the median sales price year-over-year at $608,700.
Santa Fe was only beaten by Hickory-Lenoir-Morgantown, North Carolina, at 12 percent; Appleton, Wisconsin, at 12.4 percent; Milwaukee-Waukesha-West Alice, Wisconsin, at 13.7 percent; Oklahoma City, Oklahoma, at 14.7 percent; Elmira, New York at 14.7 percent; Burlington, North Carolina at 14.7 percent, Warner Robins, Georgia at 16.2 percent; Oshkosh-Neenah, Wisconsin at 16.5 percent; and the highest jump in homes prices at 18.9 percent in Kingsport-Bristol-Bristol, Virginia, and Tennessee.
NAR states, “Compared to a year ago, the national median single-family existing-home price decreased 0.2% to $371,200. In the previous quarter, the year-over-year national median price increased 4.0%.”
“Generally speaking, home prices are lower in expensive markets and higher in affordable markets, implying greater mortgage rate sensitivity for high-priced homes,” said NAR Chief Economist Lawrence Yun.
Yun noted that western cities, like San Francisco, San Jose, and Reno saw home prices drop by at least 10 percent from a year ago whereas prices rose by at least 10 percent from the previous year in cities like Milwaukee, Dayton, and Oklahoma City.
“First-time buyers found a small measure of relief when looking to purchase a typical home during the first quarter with the quarterly declines in prices and mortgage rates. For a typical starter home valued at $315,500 with a 10% down payment loan, the monthly mortgage payment fell to $1,825, down 5.4% from the previous quarter ($1,930) but an increase of almost $450, or 32.5%, from one year ago ($1,377). First-time buyers typically spent 37% of their family income on mortgage payments, down from 39.5% in the previous quarter. A mortgage is considered unaffordable if the monthly payment (principal and interest) amounts to more than 25% of the family’s income,” the group continued.
However, in contrast to before Joe Biden’s White House reign, inflation was low, and therefore, interest rates were low. When President Trump left Washington, interest rates were hovering around 2.73 percent. Currently, U.S. interest rates under Biden are at a massive 6.35 percent, which could be discouraging buyers from purchasing or attracting them to more affordable areas.