New data shows U.S. homes prices increasing at the fastest pace since the height of the last boom, so how much more room is there to grow for those buying a home today?
The latest statistics from the S&P Case-Shiller Index shows the biggest year over year gain in U.S. home prices in 6 years, rising 6.8% to December 2012. That beat out economists’ estimates and is likely to fuel even more confidence, boosting markets.
While 6.8% may not sound like a lot to some, hot cities like San Francisco, San Diego, Miami and Phoenix have seen much higher figures, some in the 20-30% range. Tracking the spread of the recovery via the Improving Markets Index it is easy to see the improvements branching out to every state in the U.S. The question is can it keep going up?
Despite the high growth figures, when you really dig into the digits even sizzling hot markets like Phoenix and Miami which have seen an incredible surge in those buying a home in the last few years have home values still way below previous levels.
Remember that this is also just phase one. Then once we get to breakeven point and jobs and the economy pick up we will have struck the launch pad for the new boom era.
Based on historic records there will be another 10 to 15 year of boom time to follow this providing an extended period of equity appreciation and wealth building for those buying a home today.
Even at a slow and steady pace of 5% a year that is a great amount of equity and wealth to be added. However, given cyclical trends expect the pace of home price growth to continue to accelerate throughout the next decade.
