House Prices Rise 1.6% in Second Quarter of 2017
Buying a house is increasingly becoming unaffordable for Americans as houses continue to get more expensive across the United States. The Federal Housing Finance Agency (FHFA) has just revealed that the House Price Index (HPI), which tracks average home prices, is increasing across the country.
According to the FHFA, prices of U.S. houses increased by 1.6% in the second quarter of 2017, compared to the first quarter. When tracked on a monthly basis, the price hike in U.S. houses was 0.1% from May to June 2017. On a year-over-year basis, U.S. house prices jumped 6.6% in the second quarter, making it increasingly challenging for average Americans to purchase the house of their dreams.
The rise in house prices was witnessed in almost all of the states. Between the second quarter of 2016 and the second quarter of 2017, the HPI rose in 48 states and the District of Columbia.
For Americans who were saving for a downpayment to buy their own homes during this time span, the state that may have shattered the most dreams was Washington. That state is where house prices increased the most year-over-year, with average house prices jumping 12.4% since the second quarter of 2016.
The Seattle-Bellevue-Everett area of Washington State saw the biggest annual increase in house prices of the 100 largest metropolitan areas in America. House prices within this metropolitan belt increased by 15.7% on year-over-year basis.
Following Washington was Colorado, where houses got 10.4% more expensive over the year. Idaho landed the third spot, with a 10.3% year-over-year HPI increase. Florida and Utah followed next, with 9.4% and 9.2% average house price increases, respectively.
According to William Doerner, a senior economist with the FHFA, the rise in prices may have to do with the fact that sales for new houses have been remaining historically low. As a result, the supply-demand imbalance for existing homes may be pushing house prices up, making them less affordable for average American home-buyers.
Doerner’s analysis lines up with the statistics shared by the U.S. Census Bureau last week, according to which, new residential construction has dropped in the country between July 2016 and July of this year. A continued shortage of new housing will likely end up further pushing existing houses into the unaffordable territory.
“U.S. House Prices Rise 1.6 Percent in Second Quarter,” Federal Housing Finance Agency, August 22, 2017.