Home prices climbing at a rate not seen since pre-crisis boom

In the first few months of 2018, home prices skyrocketed more than in any first quarter since the housing boom of the early 2000s

By Ryan Smith

28 May 2018

Home prices are rising at a rate not seen since the pre-crisis housing boom.

In the first few months of 2018, US home prices jumped more than in any first quarter since 2006, according to a Bloomberg report. Single-family home prices spiked 6.9% year over year – the most for the start of any year since 2006, and the highest rise for any quarter since 2013.

And prices are still climbing, thanks in large part to the country’s continued inventory shortage. Consumer confidence is also up, according to Bloomberg. And housing demand is on the rise – which, along with a strangled inventory, is pushing buyers into bidding wars.

“Expect supplies to stay tight,” Prashant Gopal wrote for Bloomberg. “Builders haven’t increased production enough since last decade’s property crash and more seniors are choosing to remain in their homes rather than downsize.”

Demand is on the upswing even though purchases are getting more expensive, Bloomberg reported. Mortgage rates hit a seven-year high last week, with the average rate for a 30-year fixed-rate mortgage spiking to 4.66% – the 15th mortgage-rate increase so far in 2018, according to Freddie Mac.