Home prices have risen sharply during President Donald Trump’s first year in office as strong demand from house hunters narrows the number of available properties.
Home prices rose 6.2 percent over the past year, marking a 6 percent increase over the market’s previous 2006 peak, according to a Standard & Poor’s (S&P) analysis released Tuesday.
Home prices are growing at more than twice the rate of wages, creating affordability issues that analysts predict will lead to increased renting in metro areas experiencing the steepest home price increases.
“Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential home buyers compelled to look at renting,” David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, told The Associated Press.
Washington, D.C. delivered the slowest home price growth at just 3.3 percent while Seattle reported the strongest annual gains at 12.2 percent.
Optimism in the market has increased on the back of a 17-year-low unemployment, leaving more potential buyers feeling sufficiently secure to bid on homes. This market optimism is reflected in sales of existing homes, which reached its highest point in November since December 2006, according to the National Association of Realtors. Interestingly, these strong indicators have not led more homeowners to list their properties; the number of homes for sale has fallen 10 percent in the last year.
Housing market performance in Trump’s inaugural year has largely mirrored general economic performance. The stock market is expected close on a record high this year after the newly signed GOP tax bill gave a bump to an already surging market.
