New record tops previous peak from a decade ago, caps a four-year recovery
U.S. home prices have climbed back above the record reached more than a decade ago, bringing a close to the worst period for the housing market since the Great Depression and stoking optimism for a more sustainable expansion. The new record caps a four-year recovery from the trough of 2012, when prices sat 27% below the peak after a crash that caused more than nine million American families to lose their homes.
Home prices jumped 5.5% over the past year, and there are signs of increasing strength. Single family housing starts rose 11% in October, 2016 according to the Commerce Department, and the number of starts remains well below the historical average, suggesting room for acceleration.
Likewise, the share of first-time buyers rose to 33% in October from 31% a year earlier, inching closely the historical average of 40%.
Thirty-four of the largest hundred metropolitan areas have seen starter-home prices recover to their previous peak, while fifty-six areas have seen high end homes reach or surpass past heights, according to home tracker Trulia.
Meanwhile, the national recovery has allowed longtime homeowners to sell and relocate, making the U.S. labor force more mobile.