The economy is booming after President Donald Trump’s first year, and the American housing market is reflecting that.
According to Standard & Poor’s, U.S. housing prices have surged 6.2 percent from just one year ago, signifying a strong demand from Americans looking to buy as the economy improves overall.
What are the details?
The 6.2 percent increase is 6 percent above its previous peak in 2006, according to the S&P analysis.
However, the home prices are rising at such a quick rate that it’s created affordability issues for some would-be buyers. According to the Associated Press, that’s because home prices are rising at more than double the rate of wages.
Despite lower mortgage rates, the result of quick price growth with stagnant wages means Americans in more expensive markets will be unable to buy and forced to rent.
“Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential home buyers compelled to look at renting,” David Blitzer, a top executive at S&P, told the AP.
Which markets have seen the greatest growth?
According to the AP, Seattle saw its home prices grow by a robust 12.7 percent over the past two years, while home prices in Las Vegas grew by 10.2 percent. San Diego’s housing market grew by 8.1 percent.
By contrast, homes in Washington D.C. grew by only 3.1 percent.
Still, the home price surge hasn’t convinced many home owners to sell. The AP reported that the number of homes available on the market dropped 10 percent over the last year.