The Wall Street Journal has published today an article that shows " U.S. home prices have posted
an increase of 5.8% in June from one year ago, according to Zillow Inc., the real-estate website, the largest gain since 2006.But rising mortgage rates and the potential for more supply could eventually slow the run-up".
"Gains have been fueled by strong demand from foreigners, record-low mortgage rates, and a slowly improving economy that has released pent-up demand and strong appetites from investors converting homes into rentals".
A separate and widely watched index released Tuesday showed that home prices in 20 major U.S. cities rose by 12.2% in May from one year earlier. The Standard & Poor's/Case-Shiller index shows that home prices are now down from their 2006 peak by 24.4%, compared to a peak-to-trough decline of 35.1% in March 2012.
an increase of 5.8% in June from one year ago, according to Zillow Inc., the real-estate website, the largest gain since 2006.But rising mortgage rates and the potential for more supply could eventually slow the run-up".
"Gains have been fueled by strong demand from foreigners, record-low mortgage rates, and a slowly improving economy that has released pent-up demand and strong appetites from investors converting homes into rentals".
A separate and widely watched index released Tuesday showed that home prices in 20 major U.S. cities rose by 12.2% in May from one year earlier. The Standard & Poor's/Case-Shiller index shows that home prices are now down from their 2006 peak by 24.4%, compared to a peak-to-trough decline of 35.1% in March 2012.
"For now, inventories remain extremely tight in a majority of the nation's major housing markets. The Wall Street Journal's survey of quarterly housing-market conditions in 28 metro areas found that Phoenix, Seattle, Denver, and Sacramento, Calif., had less than a 2.5-month supply of homes for sale at the current sales pace. Dallas, Los Angeles, San Diego, Washington, D.C., and Orlando, Fla., had less than three months of supply, according to data compiled by John Burns Real Estate Consulting in Irvine, Calif.
Typically, real-estate agents consider a balanced market to have a six-month supply. Nationally, the supply of existing homes for sale stood at five months at the end of June, according to the National Association Realtors".
One question now is whether recent price gains can be sustained amid mortgage rates that have jumped by a full percentage point since May. Rising mortgage rates are most likely to squeeze prices in more expensive housing markets across coastal California and in cities such as New York and Boston.
Rising home prices could also encourage more homeowners to sell.
There are signs inventory declines will ease as price gains increase. In Sacramento, Calif., the number of homes for sale in June stood 7.5% above the level of a year ago, while inventories in Atlanta rose 9.7%. Both cities have witnessed large declines in homes available for sale as investors have scooped up large numbers of cheap properties".
