In Palo Alto, Calif. a home of 900 square feet with two bedrooms and one bathroom was just listed for $2.6 million, the latest example of sharp home price growth.
The national median home price was $215,600 in April 2018, up 8.7 percent year-over-year, but home values in San Jose, Calif. increased 26 percent in that time, to a median of $1.26 million. Realtor Laura McCarthy, who is handling the sale of the Palo Alto cottage, says she had a number of showings, "We have people coming in from all over the world," adding, "And when you look outside this bubble, it's really crazy. But this is reality for here," CBS News reports.
Higher mortgage rates add to the challenge of finding an affordable home, and some buyers may be rushing to make a purchase in case the Federal Reserve -- which hiked its key interest rate by 0.25 percent last Wednesday -- boosts rates further this year. Fixed rates for 30-year mortgages are now at about 4.62 percent, hovering near their highest level since May 2011, Freddie Mac reported on Thursday.
