San Jose's median home price surpasses $2 million mark

Home prices rose in nearly 90% of metropolitan markets in the U.S. in the second quarter, a 3% drop from the prior quarter, according to a report Tuesday from the National Association of Realtors.

The median price for a single-family home increased to $422,100, up 4.9% from the previous year, the report said.

There were other signs that U.S. prices are cooling. Twenty-nine markets, or 13% of the 223 metropolitan areas included in the report witnessed double-digit price gains down from 30% in the first quarter.

In San Jose, California, the median price of a single-family home surpassed $2 million, marking the first time a city has reached that benchmark since NAR began tracking data in 1979.

“The record-high home prices in most metro markets bring good and bad news,” said NAR Chief Economist Lawrence Yun in a news release. “It’s terrific news for homeowners who are moving ahead in wealth gains. However, it’s difficult for those wanting to buy a home as the required income to qualify has roughly doubled from just a few years ago.”

The cities with the biggest increases were Racine, Wisconsin (19.8%); Glens Falls, New York (19.8%); El Paso, Texas (19.2%); Morristown, Tennessee (16.7%); and Manchester-Nashua, New Hampshire.

Led by San Jose, seven of the top ten most expensive markets were in California. Second was San Francisco where the median price was $1.5 million—an 8.5% increase from last year.