American home prices just soared to their highest point since 2006

(Image credit: Stephen Brashear/Getty Images for Redfin)

published 26 December 2017

Things are looking up for American homeowners — but maybe not for prospective home buyers.

Average home prices have reached levels not seen since 2006, The Associated Press reported Tuesday. The Case-Shiller index, which follows the prices of American homes, reported that the average price of a home was nearly $200,000 in October of this year, compared to a little more than $175,000 in 2006.

Between October 2016 and October 2017, the average price of a home in the U.S. jumped more than 6 percent across America's nine "census divisions." All 20 metropolitan areas tracked by Case-Shiller saw an increase in the average cost of a home, though these rates of growth fluctuated across the country. AP points out that Seattle (12.7 percent) and Las Vegas (10.2 percent) had the two highest rates of increase since October 2015, while Washington, D.C.'s 3.1 percent increase was the smallest.

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One official behind the index suggested that more people who want to buy homes could become renters out of necessity if home prices continue to grow faster than the incomes of aspiring homeowners. Indeed, AP notes that the average cost of a home is increasing twice as fast as wages, which should hardly be a surprise in a country where wages have mostly been stagnant for the better part of the last half a century.

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Kelly O'Meara Morales is a staff writer at The Week. He graduated from Sarah Lawrence College and studied Middle Eastern history and nonfiction writing amongst other esoteric subjects. When not compulsively checking Twitter, he writes and records music, subsists on tacos, and watches basketball.

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