After easing throughout much of 2014, home prices across the U.S. are accelerating again.
While several local housing markets are still nowhere near as expensive as they were during the housing boom, others are approaching so-called “froth” yet again. Prices in the nation’s top 20 housing markets were 4.6 percent higher in January than in January 2014, according to the latest reading from S&P/Case Shiller. That is a bigger annual gain than the markets saw in December, when price gains began to accelerate again.
“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices,” said David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. “Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential home buyers and heightening the risk that any uptick in interest rates could be a major setback.”