Median home price shows biggest gain in 6 years

The national median home price took the biggest annual jump in six years in the second quarter of 2012, the National Association of Realtors reports, rising 7.3% from the same period last year.

Sales were down slightly from the first quarter. Both the price increases and the slowing sales likely can be attributed to shrinking inventory and a smaller percentage of discounted, distressed properties in the mix.

The median price of an existing single-family home in the second quarter was $181,500, up from $169,100 in the second quarter of 2011. That was the largest increase since the first quarter of 2006, when the median price rose 9.4% — but it was still 20.1% below the peak reached in 2006. The median means half the homes sold for more and half for less.

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The median price increased year-over-year in 110 of 147 markets covered by the report. The price stayed the same in three metro areas and fell in 34.

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"It’s most encouraging to see a growing number of metro areas with rising median prices, which is improving the equity position of existing homeowners," NAR chief economist Lawrence Yun said in a news release. "Some of the improvement in prices is due to a smaller share of sales in low price ranges where inventory is tight."

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Sales of existing homes and condos fell 0.7% from the first quarter but were 8.6% above the second quarter of 2011.

Distressed homes (bank-owned and short sales) made up 26% of the sales in the second quarter, down from 33% in the same period last year.

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But the number of home sales was down substantially, 24.4% fewer than at the end of the second quarter 2011. Inventory hit a record high of 4.04 million homes for sale in the summer of 2007 and has been declining ever since, to 2.39 million at the end of June 2012.

The picture by region:

• Northeast: Sales fell 0.6% from the first quarter but were 10.6% above the second quarter of 2011.
• Midwest: Sales rose 1.3% from the first quarter and were 16.2% above the second quarter of 2011.
• South: Sales were up 1.3% from the first quarter and up 7.7% from the second quarter of 2011.
• West: Sales fell 5.3% from the first quarter and were up 3% from the second quarter of 2011.