Charlotte-area home prices are setting new highs, exceeding previous peaks set just before the recession at a time of growing concern about fast-rising prices across the U.S.
April’s average home prices in the Charlotte metropolitan area were more than 2 percent higher than their previous peak in August 2007, according to S&P/Case-Shiller data released Tuesday. The widely watched index typically lags by two months.
The report cited Charlotte, which first surpassed its 2007 peak in March, as one of seven U.S. cities now posting record prices.
While that development is good news for homeowners whose property values plunged in the housing downturn, it is fueling worries that prices are becoming increasingly unaffordable for many potential buyers.
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Last week, Lawrence Yun, chief economist for the National Association of Realtors, said there’s a “glaring need” for more home construction to combat low supplies of homes for sale. Those shortages are pushing prices out of reach for plenty of prospective first-time buyers, Yun said.
“One has to really ask questions about affordability, affordability, affordability,” he said. “The builders are not building.”
In addition to Charlotte, new price highs are also being set in Boston; Dallas; Denver; Portland, Ore; San Francisco; and Seattle, Wash., Case-Shiller data show.
Across 20 U.S. cities, April home prices increased 5.4 percent from a year earlier. In Charlotte, they rose 5 percent.
Nationwide, prices have recovered from lows hit in early 2012 during the housing downturn. In Charlotte, home prices are now more than 28 percent above lows reached in January that year.
In a statement, David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said increases in U.S. home prices reflect low unemployment rates, low mortgage interest rates and consumers’ generally positive outlook.
But he cautioned that the housing market faces uncertainty created by Britain’s decision last week to split from the European Union, as well as the upcoming U.S. presidential election.
Blitzer said those events will create distractions for homebuyers and investors in the coming months.
In a separate report Tuesday, Fitch Ratings said U.S. mortgage rates will likely approach all-time lows following Britain’s vote, creating an incentive for many homeowners to refinance mortgages.
The Fitch report also touched on the rapid growth in home prices, saying major metropolitan areas in California, such as Los Angeles and San Francisco, are “overpriced” by as much as 15 percent.