The historically low mortgage rates and higher household income has boosted home buying power. According to the Real House Price Index (RHPI), June 2021 saw a 6.8% increase compared to June 2020. Nominal home prices were also reported 32% higher than they were in the 2006 housing boom peak.
The Real House Price Index (RHPI) is under the Federal Housing Finance Agency. The FHFA House Price Index (FHFA HPI®) is the nation’s only collection of public, freely available house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities that extend back to the mid-1970s. The Federal Housing Finance Agency collects data to examine based on home sales and price fluctuations. The data is based on the national, census division, state, metro area, county, ZIP code, and census tract levels.
Comparing rates and prices to the rates and prices during the 2006 housing boom sees a big difference. Current adjusted home prices are still 42% lower than they were during the peak in 2006. The average 30-year fixed mortgage rate is still 3.3 points lower than it was during the peak of 2006. Not only are rates lower but the household income has risen 55% since the boom. This coupled with the lower mortgage rates has given the nation a 129% increase in housing-buying power than in 2006.
Today’s current market is under a historic shortage in housing inventory that is a huge catalyst to the current price appreciations. Not only is there a shortage but according to reports, homes that hit the market sell within just 17 days!
If you are in the process of purchasing a home or are just interested in starting the process, contact your local real estate professional who can help with the process from start to finish. With such a strong and competitive current housing market, a Realtor is a smart way to go.
