The Federal Housing Finance Agency (FHFA) reported that U.S. home prices climbed 1.8 percent in March, the largest monthly gain in at least two decades.
The rise from the previous month topped analyst estimates, which ranged from a 0.2 percent decline to a modest improvement of 0.7 percent. Such factors as all-time-low rates, job gains and a dearth of properties for sale in many markets are working together to bolster demand for homes.
Furthermore, sales of new homes rose in April, up 3.3 percent from March and 9.9 percent higher than a year earlier. The median price of a new home hit $235,700 last month, a gain of 4.9 percent from April 2011.
The data provides additional evidence that the housing market is starting to rebound.
With rising rents, more renters are finding it economical to be home owners instead — even in pricy markets such as New York and San Francisco, California. Rents are increasing at about the same pace that home values are dropping, and low mortgage rates keep home payments low.
Home prices are rising and home affordability has been at record highs.