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Home-Pice Growth Sped Up Last Year!

*This article is brought to you by the Wall Street Journal & California Association of Realtors 

Home-price growth accelerated late last year, according to a report released Wednesday by the National Association of Realtors, as a lack of supply continues to drive up prices despite cooling demand.

The national median existing single-family home price grew nearly 7% to $222,700 in the fourth quarter, compared with the same time last year, Realtors said. Prices increased 5.4% in the third quarter compared with a year earlier.

That price bump came despite the fact that the pace of sales slowed. Total existing home sales, including single-family properties and condos, declined 5.4% to a seasonally adjusted annual pace of 5.18 million from nearly 5.5 million in the third quarter.

Fewer metro areas saw price gains, but those that did were much more likely to see big double-digit increases. Prices increased year-over-year in 81% of markets measured by NAR, compared with 87% in the third quarter. But 30 metro areas saw double-digit increases, compared with 20 metro areas in the third quarter.

Western and sunbelt markets continued to see some of the biggest gains, with several Florida markets posting some of the largest, including Punta Gorda with a 20.7% increase, Palm Bay with a 18.7% increase and the Cape Coral-Fort Myers area with a more than 16% increase. Toledo, Ohio, a chilly midwestern market, was an outlier with a 21.2% increase.

The five most expensive markets in the county were San Jose, Calif., where the median existing family home price was $940,000, San Francisco at $781,600 and Honolulu at $716,600.

“Homeownership continues to be out of reach for a number of qualified buyers in the top job-producing, but costliest, parts of the country—especially on the West Coast and parts of the South,” said Lawrence Yun, chief economist at NAR.

As the market heads into the crucial spring selling season, the affordability of homes is likely to remain a concern. The Realtors have blamed the declining pace of home sales on the lack of affordability, pointing to the fact that first-time buyers aren’t returning to the market in large numbers.

“With price appreciation likely to continue at the same pace—and even higher in some markets—incomes need to rise even more to keep affordability conditions from declining further,” Mr. Yun said.