Case-Shiller came out with its National Home Price Index, reflecting home prices have increased by 6.5% annually.
The uptick in the economy showed a strong demand for homes on a nationwide basis. Currently, Millennials are slowly dipping their toe into the market now, while Boomers are transitioning and downsizing, at the same time. One of the reasons why homes are becoming more expensive for buyers reflects a combination of factors including the increase in mortgage rates. Affordability appears to be somewhat of a problem, but low rates of new construction and low inventories are the biggest draw-back hemming-in first-time buyers from creating a massive home-buying bubble from happening in 2018.
The Case-Shiller 10-City Composite, as well as the 20-City Composite, increased 6.5% and 6.8% year-over-year, respectively.
According to the report, home prices have increased by 48% from 6 years ago. This surely demonstrates that the real estate market is in full recovery.
Seattle, Las Vegas and San Francisco continue to lead the surge of home price gains with increases of 13%, 12.4% and 11.3%, respectively, year-over-year.
Seattle has been the city with the largest gains for the past 19 months.
The higher prices and the increase in mortgage rates will keep the market from completely overheating, since the current month supply of inventory houses unsold is put at 3.8 months.