The real estate market during the pandemic 2:57
(CNN) --
Home prices rose by double-digit percentages in most major US cities earlier this year. Of the 185 metropolitan areas tracked, 70% showed double-digit growth in prices. average home prices during the first quarter of 2022, compared to a year earlier, according to a report from the National Association of Realtors.
The number of cities with double-digit increases had been falling from 94% in the second quarter of last year to 78% in the third quarter and down to a revised 66% at the end of last year.
But prices in early 2022 went up again in many places.
The median price of a single-family home in the US was $368,200 in the first quarter, up 15.7% from a year earlier, according to the report.
"Prices across the country have risen for most of the past two years, including the first quarter of 2022," said Lawrence Yun, chief economist at NAR.
"Given the extremely low inventory, it is unlikely that we will see price declines, but the upside should taper off in the coming months."
These numbers are bad news if you're trying to buy or refinance a home.
Yun said the slower pace of appreciation will be driven by an increase in the supply of homes for sale and less competition among buyers, as rising mortgage rates will push would-be homeowners out of the market.
"I expect a further pullback in housing demand as mortgage rates further affect affordability," he added.
"There are no signs that rates are going to come down anytime soon."
Where did home prices rise the most?
The biggest year-over-year price increases in the first quarter were in small and medium-sized cities, half in Florida.
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Punta Gorda, Florida experienced the largest appreciation in the first quarter, rising 34.4%.
It was followed by Ocala, Florida;
Ogden, Utah;
Lakeland and Winter Haven, Fla.;
Decatur, Alabama;
Tampa and St. Petersburg, Florida;
Fort Collins, Colorado;
Bradenton and Sarasota, Florida;
Myrtle Beach, South Carolina;
and Salt Lake City, Utah.
"Traditionally, houses in these markets were considered relatively cheap, but with recent migration trends, prices have risen significantly," Yun said.
"Price increases in many smaller tertiary cities are now outpacing those in the more expensive primary and secondary markets. This is both as buyers seek less expensive homes and also as a result of more opportunities to work from home, which makes it possible to relocate to smaller markets."
Half of the ten most expensive cities in the country are in California.
San Jose, California had the highest home prices in the country, with the median home price at $1,875,000, up 25% from a year ago.
San Francisco followed;
Anaheim, Calif.;
Honolulu;
San Diego;
Boulder, Colorado;
The Angels;
Seattle;
Naples, Florida;
and Denver, Colo.
Affordability suffered
As inventory fell to record lows in the early part of this year and home prices continued their steady climb, buyers scrambled to close deals before mortgage rates rose.
Entering this year, the interest rate on a 30-year fixed-rate mortgage averaged 3.11%, according to Freddie Mac. At the end of March, it was 4.67%.
It has risen more than 5% since then and is expected to rise further this year.
With higher home prices and mortgage rates, affordability worsened considerably in the first quarter.
US mortgage rates hit 5% for the first time in over a decade
The monthly mortgage payment on a typical single-family home, with a 20% down payment, rose to $1,383, an increase of $319, or 30% more than a year earlier, according to NAR, ( the National Association of Real Estate Brokers).
The payments are also absorbing a larger share of family income, with families typically spending 18.7% of their income on mortgage payments, up from 14.2% a year ago.
"Decreasing affordability is always the most problematic for first-time buyers, who don't have a home to take advantage of, and continues to be a challenge for potential moderate-income buyers as well," Yun added.
In the NAR analysis, a mortgage is considered unaffordable if the monthly payment, including principal and interest, is more than 25% of the family's income.
The national median home price of $368,200 was unaffordable for the typical first-time buyer.
The hit to affordability means first-time buyers spent more of their income on a home payment than other buyers.
The typical starter home had a median price of $313,000 in the first quarter, NAR said.
First-time homebuyers typically spend 28.4% of household income on mortgage payments, which is above the affordability threshold.
The income to qualify to buy a median-priced home with a 30-year fixed-rate mortgage and a 20% down payment in the United States at the beginning of the year was $66,365.
But depending on the average price in various areas, the qualifying price could be lower or significantly higher.
In Youngstown, Ohio, for example, a median-priced home buyer needed to earn $24,050 a year to qualify for a mortgage.
Meanwhile, in San Jose, a buyer had to earn $341,107 a year to qualify for a mortgage to buy a median-priced home.
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