According to the S&P Dow Jones Case-Shiller Home prices indices, four cities – Denver, Dallas, Boston, and Portland – have set new all-time highs for prices.
Denver has shown 44.3% recovery in home prices since 2012 lows; Dallas has improved 38.3%; Boston has improved 26.7%; and Portland has seen an uptick of 45.7%.
Nationally, American home prices have increased 31% since the low point in 2012.
And while this is good news for originators and others in the housing industry, it seems the recovery has also brought with it affordability issues.
According to Fannie Mae’s November Home Purchase Sentiment Index, consumers are less optimistic about housing prospects. The index decreased 2.4 points to 80.8 in November.
“The challenge of housing affordability coupled with tight supply may be preventing overall housing sentiment from gaining momentum as income growth isn’t keeping pace with the cost of housing,” Fannie Mae said in a release. “Consumers’ net attitudes about the direction of their household income relative to a year ago fell 5 points during the month, setting this HPSI component back to just below its March 2015 level.”
So the recovery – as impressive as it is – has been a double-edged sword for home buyers.
“This year’s housing market is poised to be the best since 2007; however, consumers’ ability and willingness to purchase a home is likely to remain an issue in many regions going forward until we see consumer confidence in their income growth consistently gain traction,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a release.
Home prices have largely recovered since the housing market collapse, and recently released S&P Dow Jones stats show just how much several major markets have improved – but is it all good news?