In February of this year, home prices saw annual growth of 6.3 percent, and are up 6.7 percent from the July 2006 peak, according to the most recent S&P CoreLogic Case-Shiller Indices.
While the proverbial walls are closing in on homebuyers, particularly in Las Vegas, San Francisco, and Seattle, home sellers are enjoying rapid home price appreciation. Seattle home prices increased the most, 12.7 percent YOY, and the typical home in the city spent just 29 days on the market in February, per Realtor.com. "There is no let-up to rising home prices," National Associate of Realtors' chief economist Lawrence Yun said in a statement, CNN reports.
At 4.47 percent, rates are still below historical averages. The only thing that might slow demand is if rates on a 30-year fixed mortgage climb above 5 percent, Keith Gumbinger, vice president of HSH.com, said. "There is an important psychological point when you cross 5 percent," he said. "That's when people will really start to pay attention and rethink buying over affordability. You may find some borrowers who step to the sidelines."
