Values of homes in various parts of the country continue to rise. While some individuals may feel nervous that a housing bubble crisis may develop, economists remain confident that the real estate market is strengthening healthily, according to The Wall Street Journal.
With the release of the S&P/Case-Shiller Home Price Index on May 26, home price gains increased notably in march. However, the increase should not cause any alarm.
"There is no bubble to be anxious about," said David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.
Blitzer also noted that the price growth is less aggressive than it was during the housing market crisis in 2008.
Gains in Prices Driven by Demand
The demand is likely the driving force behind the increase in value. According to the press release from S&P Dow Jones Indices, 10-city and 20-city composites experienced notable year-over-year jumps during March. The 10-city composite jumped 4.7 percent when compared to the previous year while the 20-city composite rose 5 percent on a year-over-year basis.
San Francisco and Denver experienced the most substantial gains, both jumping 10 percent or higher when compared to the previous year. These cities also tend to be locations in high demand by buyers.
"Home prices have enjoyed year-over-year gains for 35 consecutive months," said Blitzer."The pattern of consistent gains is national and seen across all 20 cities covered by the S&P/Case-Shiller Home Price Indices."
Current Conditions Bode Well For the Housing Market
More individuals will likely be able to purchase homes and help bolster their local markets due to a healthier economic situation, better job opportunities available and more lenient lending opportunities, according to the Mortgage Reports. Interested homebuyers may feel more confident in their own personal finances and decide to make the leap to homeownership.
In addition, with 3 percent down payment options available through government-sponsored enterprises, such as Freddie Mac and Fannie Mae, those who decide to apply for a home loan can do so with a smaller down payment.
Low interest rates are another pull that may help continue to drive up the demand for housing, ensuring the healthier improvement of the housing market. Individuals can lock in lower interest rates and save a great deal of money over the life of the loan they are approved for.
The housing market is reflecting the local markets and should not cause alarm for a housing bubble situation.