Homes are finally being sold at prices equivalent, or higher, to the market peak in 2006. Median home prices have reached $236,400, which is slightly above the previous record high of $230,400 from July 2006. Not only are prices higher, but homes are also being sold at a faster rate. Economists believe strong employment numbers have fueled home sales. In addition, many homebuyers are anxious to receive a mortgage while interest rates are historically low.
Higher home prices bring relief to homeowners who have found themselves underwater. However, first time homebuyers are having a tough time entering the housing market. Tami Pardee, owner of Pardee Properties in the Los Angeles area, said, “If they didn’t buy and get in the market it’s hard to get into the market unless you have a lot of money.” Even first time homebuyers, who earn a respectable paycheck, may be unable to afford a mortgage if prices rise too fast. In turn, they will miss a vital opportunity to “move up” in the improving economy.