"It's Unstoppable" - US Home Prices Rise At Fastest Pace In Over 3 Years

Tyler Durden's picture

US national home prices are up 6.07% YoY in August - the fastest rate since June 2014.

We note this data is for August - before the hurricanes.

Seattle (up 13.2 percent), Las Vegas (up 8.6 percent), and San Diego (up 7.8 percent) were the top three cities in terms of year-over-year price appreciation; all cities showed gains of at least 3 percent.

After seasonal adjustment, San Diego had the biggest month-over-month increase at 1 percent, while Atlanta was the only city to show a decline, at 0.2 percent.

Pushing home prices to a new record high...

“Home-price increases appear to be unstoppable,” David Blitzer, chairman of the S&P index committee, said in a statement.

 

At the same time, “measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking,”

 

and the Fed’s interest-rate hikes are likely to push mortgage rates higher over time, “removing a key factor supporting rising home prices,” he said.

In fact, US homes have never been more unaffordable...

 

As every single city's home prices are rising faster than earnings...

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Dr. Engali's picture

No worries. It’s different this time.

Haus-Targaryen's picture

You should see price increases in any metropolitian German city.  

I'd *LOVE* it to only be 6% y/o/y.  Want a house withing 40 miles of Berlin?  Get ready to cough up 50% more than you would have had to four years ago. 

 

SheepRevolution's picture

And I'd love to see real estate prices in Sweden being equal to the current price level in Germany. Quite telling... Prices in Sweden have reached bizarre levels. Average home price in Stockholm for a regular size house - but older than 50 years - is close to 1 million USD.

Haus-Targaryen's picture

So random suburb outside of Berlin ... partially renovated Soviet house will run you a cool 450.000€.  Expect 130 square meters and a 300 square meter garden. 

If you want "normal" house prices, then you're looking 50 miles out plus. What does the A+ neighborhoods cost? 

Well, a 2000 square foot home in Potsdam that doesn't look like Stalin himself personally drew it ... buy in is ballpark €3.3 million. Same house in Grunewald will run you 5 million eur. 

My wife's cousin bought a house in Strausberg some 10 years ago for €325,000.  They've done light renovations to it. Got it appraised last week, range was between 950.000€ and 1.200.000€. 

Real estate prices in these major "A" cities are so far removed from reality at this point. 

SheepRevolution's picture

Is it mandatory to pay off a mortgage within 30 years? Or can one just not pay off the mortgage at all?

Haus-Targaryen's picture

You should see price increases in any metropolitian German city.  

I'd *LOVE* it to only be 6% y/o/y.  Want a house withing 40 miles of Berlin?  Get ready to cough up 50% more than you would have had to four years ago. 

 

skbull44's picture

Here in Canada we're constanly told it's all about supply and demand...

Really!

https://olduvai.ca

JohnGaltUk's picture

This is my best guess; investors\gamblers are dumping paper because as Voltaire wrote, "Paper money eventually returns to its intrinsic value -- zero." This will also include bonds. People are dumping paper for hard assets.

 

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

- Ludwig von Mises

yogibear's picture

Keep pushing that bubble higher.

LawsofPhysics's picture

What exactly is the Fed "buying" it with?

"Full Faith and Credit"

yogibear's picture

Fed Head Williams needs to start pushing 200 year mortgages for those bubble buyers in CA.

tmosley's picture

"Unstoppable"

Hold my beer.

LawsofPhysics's picture

Yes, Ben Bernanke would agree.  He said as much in 2007.

yogibear's picture

That’s what infinite cheap central bankster money does.

kochevnik's picture

Simply auction for debt slavery to banksters.  Highest bidder 'wins' indentured servitude. MSM pumps propaganda that bubble is sustainable and reasonable. Then banksters pop bubble, call loans and gain ownership of real assets for free

https://www.youtube.com/watch?v=Um7pMggPnug

Yellow_Snow's picture

HYPER Fing INFLATION

NoDebt's picture

"Home prices appear to be unstoppable."

Thanks for jinxing it, asshole.

 

Aubiekong's picture

Soon it will take a semi truck full of debt notes to rent buy your next home.

Navymugsy's picture

Perfectly normal behavior as the US population cann afford to spend 50% of their gross on a home.

Bam_Man's picture

...And the other 50% on "health care".

Navymugsy's picture

Health care is free. Duh!

ElTerco's picture

... and another 50% on taxes.

BigWillyStyle887's picture

Home prices can only go up guys, everybody knows that. The janitor at my plant just explained the whole thing to me!

Navymugsy's picture

Janitors are smart. Can he give me stock and options advice?

BigWillyStyle887's picture

All in on FANGS and Japanese debt, cant go wrong with those surefire bets.

DEMIZEN's picture

janitors may not be smart but they have the numbers. There was once a meat cutter who argued home values with me, and he ended up being right.

BingoBoggins's picture

 

No matter the market, they always clean-up.

 

taketheredpill's picture

Wealthy investing in larger more expensive homes shifting some of their wealth into real assets?

LawsofPhysics's picture

"Housing is not in a bubble" -  Ben Bernanke 2007

buzzsaw99's picture

and the Fed’s interest-rate hikes are likely to push mortgage rates higher over time...

 

Brilliant, Snape (Blitzer) - once again you've put your keen and penetrating mind to the task and as usual come to the wrong conclusion. [/Sirius Black]

Nature_Boy_Wooooo's picture

BitHouse......

It's a store of value that you can't instantly sell or transfer without an agent. When you sell it you have to buy more of it somewhere else at the same market price or be homeless. You don't actually have any wealth with BitHouse but you can tell your friends "I have xxxxx much in equity. But rest assured it will always increase in theoretical value.

gatorengineer's picture

can someone tell me where?  I am at 55% of 2007/8 here in eastern Pennsytucky.

redc1c4's picture

"Unstoppable!"...

until it isn't.

DEMIZEN's picture

15 years ago in a class i would go like: prof if these trend averages continue a studio in santa monica would cost 5 millions in 2025. and the class was laughing...

A. Boaty's picture

My realtor sez now looks like a good time to buy.

ElTerco's picture

Better hurry while there is still any inventory at all, since interest rates are about to go up and you'll be priced out of the market.

1stepcloser's picture

Can you fog a mirror loans...get your fog a mirror loans right here....

scubapro's picture

 

 

WSJ article yesterday regarding a paper the Fed did....suggesting that a product/mortgage of 100% ltv (for buyers who cant save money to put down b/c rent is too high--dont forget about maintenance!).    100% ltv and the PAYMENT is fixed, but depending on where rates are the payment may put more or less towards equity each month...so a floating rate and you may or may not ever pay off or down the mortgage.

after reading it, it sounds like a perfect product...people THINK they are buying a home, but really just pay more in interest forever--this is a perfect product for the next 20 years as rates will be climbing....it will be impossible for people in this type of product to get ahead.  not too different than neg am loans but those can blowup...this one endentures the borrower for life, no chance of reset!    

tekin112000's picture

I call bullshit

I own a condo inside the beltway in NoVA and it's price has not budged since the market dropped in 2008

MadRunner's picture

Most Americans are on such a tight check to check budget they can barely squeeze a fart out of their ass.