Low interest rates stimulate the continued rise in U.S. housing prices. Phoenix is ​​on the list

Low interest rates stimulate the continued rise in U.S. housing prices. Phoenix is ​​on the list. The business research company RealtyTrac released a survey report on the housing situation in the United States last week, reporting...

The business research company RealtyTrac released a survey report on the housing situation in the United States last week. The report shows that housing prices are rising faster than the wage growth of most Americans, such as Los Angeles, Phoenix and San Diego. The lower and middle class Americans in densely populated areas are once again experiencing housing difficulties. This year, more than two-thirds of the country’s real estate markets have experienced skyrocketing prices, including central cities like San Francisco and New York. A latest report from Bank of America estimates that current U.S. home prices are 14% overvalued from reasonable prices.

U.S. housing prices have been rising in recent years. The S&P Case-Shiller U.S. 20-city composite housing price index increased by 5.7% year-on-year in January this year, while Denver, Portland, Seattle, San Francisco and other cities even grew by more than double digits. The housing price index is only 11% away from the peak in 2006. Lawrence Yun, chief economist of the National Association of Realtors (NAR), said that when U.S. household income and wages are only growing slightly, double-digit price increases are not healthy and will discourage some potential home buyers from entering the market. He described that in the current U.S. housing market, finding the right property at the right price has become a major problem for potential buyers. NAR recently announced that existing home sales fell by 7.1% in February, the lowest in three months. However, the existing home sales contract index increased by 3.5% in the same month, highlighting the abnormal phenomenon of insufficient supply of existing homes forcing housing prices to rise. It also shows that the continuous decline in mortgage interest rates has helped the purchasing sentiment of the housing market.

RealtyTrac analyzed housing transaction records in 456 regions in the United States and found that real estate speculators are eager for quick success, the growth of housing prices has almost risen to some historical highs in special periods, and there are concerns about price bubbles in the U.S. real estate market. Taking into account the affordability of housing prices and income, high housing prices are still sought after by ordinary working-class people. Daren Blomquist, senior vice president of RealtyTrac, believes that homebuyers need to spend money on housing, leaving less and less money for other consumption. Although the growth rate of house prices in most housing markets is lower than historical highs, house prices are still growing, and the floating average wages of homeowners make the prospects of the U.S. housing market unpredictable.

According to data from Freddie Mac, the 30-year mortgage interest rate in February this year was 3.66%, which was lower than 4% for seven consecutive months. In 2007, Robert Shiller, the founder of the S&P Case-Shiller housing price index, described in a paper that rising housing prices triggered people's expectation of rising prices. He said that the feedback mechanism of price increases is a social epidemic. Now, the reinforcing effects of this feedback mechanism are continuing to expand. A year ago, the American people believed that house prices would rise by 2.5% in 12 months. When people were surveyed in February, they thought that house prices would rise by 4.4% in a year. Now, the latest NAR survey found that people expect house prices to rise by as high as 8.2%. Bank of America believes that housing prices are likely to correct. However, since the momentum and expectation of rising housing prices are still there, the inertia of rising housing prices in the United States will remain unchanged before it truly pulls back and causes a retrenchment of buying sentiment. However, the room for increase may not be as high as public expectations.