Prices for single-family homes, which climbed 5.3 percent from a year earlier nationally, reached a peak in 64 percent of metropolitan areas measured, the National Association of Realtors said Tuesday. Of the 177 regions in the group’s survey, 15 percent had double-digit price growth, up from 11 percent in the third quarter.
Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.
The consistent price gains “have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation,” Lawrence Yun, the Realtors group’s chief economist, said in a statement. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”
Having read a number of stories like this, I wonder if there is a better way to distinguish between economic indicators that are good all around versus one like this that may appear good – home values are going up! – but really mask significant issues – the values may be going up because many buyers cannot afford more costly homes. The news story includes this information but I suspect many will just see the headline and assume things are good. Another example that has been in a lot of partisan commentaries in recent years (with supporters of both sides suggesting this when their party was not president): the unemployment rate is down but it does not account for the people who have stopped looking for work.
In the long run, we need (1) better measures that can encompass more dimensions of particular issues, (2) better reporting on economic indicators, and (3) a better understanding among the general populace about what these statistics are and what they mean.