(CN) — Home prices surged higher in June led by sizable increases in Seattle, Washington; Portland, Oregon; and Dallas, Texas, Standard & Poor’s said Tuesday.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index measures the value of real estate in 20 major metropolitan areas across the United States. The index released Tuesday revealed that home prices rose 5.7 percent in June, creating stress for would-be buyers worried about affordability.
The measure suggests that the price of the average home currently on the market is now well above the price of the average home during the real estate bubble of the summer of 2006.
Tuesday’s report revealed that the largest price gain in June was seen in the Seattle metro area, which saw a 13.4 percent increase. Portland, Oregon witnessed the second biggest increase, at 8.2 percent, followed by Dallas, Texas, at 7.7 percent.
Nine cities reported greater price increases in the year ending June 2017 versus the year ending May 2017.
The biggest driver of the increases are a shortage of properties for sale. The Standard & Poor’s analysis found that home prices are now rising at a rate close to double the pace of growth in average hourly earnings.
But buyers are still showing up thanks to historically low mortgage rates.
“Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, in a written statement.
Metro areas that saw a more modest gain in home prices included New York City and Washington, D.C., where prices rose about 4 percent, Chicago, which saw a 3.2 percent gain, and Cleveland, where prices rose 2.9 percent.
Last week the National Association of Realtors said the number of existing homes listed for sale has plummeted 9 percent over the past 12 months to 1.92 million. As a result, the Realtors said, the median sales price has risen 6.2 percent to $258,300.
The average 30-year fixed rate mortgage was 3.86 percent last week, according to mortgage buyer Freddie Mac.