House prices in the United States are rising inexorably. However, higher mortgage rates could slow the upswing at some point.

In high demand: American single-family homes like here near Dallas

Dhe memories of the crash of the American housing market are fading. Ten years after the great financial crisis caused by the collapse of this market, the prices of private real estate in the United States are rising steadily. House prices were up 6.4 percent year over year in April as measured by the S&P Corelogic Case-Shiller Home Price Index. The growth rate was thus slightly below the value of the previous month, when house prices had climbed 6.5 percent year-on-year. But in some metropolitan areas, prices rose around twice as much. In Seattle on the west coast of the United States, home to tech giants like Amazon and Microsoft, house prices in April were 13.1 percent higher than last year. In Las Vegas, where prices had fallen the most during the crisis, prices climbed 12.7 percent. The third strongest price increase was reported by the realtors from San Francisco, also a center of the technology industry. House prices rose there by 10.9 percent.

“The favorable economic situation and moderate mortgage rates are supporting the recent rise in house prices,” said David Blitzer, chairman of the index committee of the S&P Dow Jones Indices company, which recently published the monthly market barometer. In addition, there is a short supply of houses that are for sale. According to the American realtors’ association NAR, the number of houses for sale in May was 6 percent lower than in the previous year.

The housing market plays an important role in the American economy because homes have traditionally been the single most important element in American wealth creation. House prices influence consumer behavior in an economy that is two-thirds dependent on private consumption. Homeowners spend more money when they feel richer.

How long will the price increase continue?

In view of the experiences from the financial crisis, however, market observers are wondering how long the price increase will continue and what could trigger a downturn. In nominal terms, prices have long since reached the record level set in 2006. However, if you take inflation into account, prices have only fully recovered in the three metropolitan areas of Dallas, Denver and Seattle. Across America, the Case-Shiller house price index is still 14 percent below the pre-crisis level. In Las Vegas, house prices would have to rise by as much as 47 percent to get back to 2006 levels. Robert Shiller, economics professor at the elite Yale University, Nobel Prize winner and one of the namesake of the house price barometer, is therefore not yet worried about an imminent drop in real estate prices. “The market has been looking overheated since 2012 when the upswing began. And it looks like it will continue, ”Shiller said in a recent interview. Despite rising prices, Shiller does not see the same speculative exuberance that characterized the market in the mid-noughties. In addition, banks have become more cautious in granting mortgages because the experience of the crisis has had an impact.