Here Are the Numbers Showing How Housing Has Caught Fire
NEW YORK (TheStreet) -- For a batting average, the real estate market couldn't be swinging much better. Trulia
Overall, U.S. homeowner asking prices are on a steady upward trend, rising by about 1.5% per month over the past five months and backing up what economists have been seeing and saying for most of the year: The real estate market is catching fire, and homes are appreciating at a sustainable rate after five years of declining prices.
Even factoring in foreclosures, U.S. home prices are up 11.4% from June 2012 to June 2013.
Trulia took a pragmatic approach in its most recent data release, though, noting that the rate of appreciation on U.S. home prices "won't keep rising this fast."
The firm cites higher mortgage rates as a big reason prices should lose some momentum. The 30-year fixed mortgage rate stood at 4.46% Friday, when mortgage brokers said most mortgage deals are closing at rates over 5%.
Trulia also points to more inventory on the market (meaning more "for sale" homes for buyers to choose from), and reduced investor demand in real estate now that homes are getting more expensive to buy.
"Rising home prices have swept the country," says Jed Kolko, Trulia's chief economist. "Local markets that suffered most during the housing crisis are seeing the biggest price rebounds today. Now even markets that escaped the worst of the bust like Chicago and Baltimore are seeing prices climb. However, these runaway price gains won't last: Both rising mortgage rates and slowly growing inventories should start tapping the brakes on home prices, preventing them from rising back into bubble territory."
Soaring home prices could keep younger buyers out of the market, which could make it harder for so-called "starter homes" to move off the market.
"In the past year, buying a new home has become 20% more expensive," Kolko says. "Roughly half of this higher cost comes from soaring home prices, which are up almost 11% in the past year. The other half comes from rising mortgage rates, which have added another 10% to the overall cost of homeownership."
"For young first-time homebuyers who don't remember life during and before the bubble, these rising costs are a rude awakening," he says.
U.S. regional markets where home prices are rising the fastest include Edison-New Brunswick, N.J. (up 8.6%); Chicago (8.4%); and Kenosha County, Wis. (7.9%).
Baltimore, St. Louis and New Orleans are among the other U.S. metro areas seeing the highest growth rates, with home prices all rising by more than 4.5% last month.