H
omeowners saw their equity grow in the third quarter, with nearly 90% of major U.S. metro areas posting increases, according to the National Association of REALTORS. Markets in the Midwest posted significant gains, including double-digit increases in cities like Racine, Wis., and Youngstown, Ohio. The national median home price was $418,700 in the third quarter, a 3.1% year-over-year increase.

    Home prices are slowing down slightly from their rapid growth in recent years, which could improve housing affordability for buyers. Mortgage rates have also decreased, averaging around 6% for a 30-year fixed-rate loan. As a result, the monthly mortgage payment on a typical existing single-family home has fallen to $2,137.

    "Housing affordability has been a challenge, but the worst appears to be over," said NAR Chief Economist Lawrence Yun. "Rising wages are outpacing home price increases, and more inventory is reaching the market."

    First-time home buyers have struggled in the past year due to higher prices and limited equity from previous home sales. However, they may find slightly better affordability conditions compared to previous quarters. For a $355,900 home with a 10% down payment loan, the monthly mortgage payment fell to $2,097.

    The top 10 areas for price gains all posted double-digit increases last quarter, led by Racine, Wis., and Youngstown-Warren-Boardman, Ohio-Pa. California remains the most expensive state, with cities like San Jose-Sunnyvale-Santa Clara and Anaheim-Santa Ana-Irvine topping the list of priciest markets in the nation.

    The market share for first-time buyers has shrunk to record lows, accounting for 24% of home sales. To succeed in today's housing market, they may need more money, with typical households spending 38% of their income on mortgage payments compared to other households that devote 25%.