Home prices have been rising steadily since the recession, but the gains are suddenly accelerating as spring demand heats up in an already highly lean and competitive market.
Prices surged 7 percent higher in March compared with a year ago, according to CoreLogic. That is the biggest gain since May 2014. All 50 states saw home values increase, and prices are now higher than they were at the peak of the last housing boom, although that does not account for inflation.
“High demand and limited supply have pushed home prices above where they were in early 2006,” said Frank Nothaft, chief economist at CoreLogic. “New construction still lags historically normal levels, keeping upward pressure on prices.”
The price gains are greatest in the nation’s largest markets. Half of the nation’s 50 largest markets are now considered overvalued, meaning home prices are at least 10 percent higher than the long-term, sustainable level.
Las Vegas, San Francisco, Denver and Los Angeles are all overvalued, as are Miami, Houston and Washington, D.C., according to CoreLogic.
Prices are seeing the biggest gains at the lower end of the market, where supply is leanest. Sales of homes priced under $100,000 fell more than 20 percent in March, according to the National Association of Realtors, not because there wasn’t demand, but because there was not enough supply.