US Home Prices: Income growth lagging home value appreciation - Wells Fargo

The S&P CoreLogic Case-Shiller National Home Price Index rose 0.7 percent in November after a similar gain in October noted analysts from Wells Fargo. They point out that western metros are still seeing the largest gains, but appreciation is accelerating in other areas.

Key Quotes: 

“Home prices rose 0.7 percent in November, matching October’s gain. Home prices have risen 6.2 percent over the past year.”

“Strong economic growth has boosted home buying but new construction has been slow to ramp up. Both markets should see strong gains in single-family starts this year.”

“The persistent supply-demand imbalance has driven prices higher across the country and worsened affordability concerns. Home prices have risen about three times faster than inflation and twice as fast as income growth over the past year.”

“Home prices are approaching prior peaks broadly, with 8 of 20 markets already there. Rising home prices are fueling an affordability migration but there are fewer affordable markets left.”