A recent report from Knight Frank found that U.S. home prices surpassed their 2006 peak in September.
Realtor.com reports that the rise in prices is due to low amounts of new construction and the lack of sellers, which is causing demand to grow. Also, the economy has strengthened, more high-paying jobs are available, and that potential buyers feel secure enough to buy a house.
The numbers are a bit skewed, though. Rapid growth in hot markets like San Francisco have bumped up the national average across the board.
Prices may be up nationally, but they’re “not recovered on a real or inflation-adjusted basis,” says Realtor.com‘s chief economist, Jonathan Smoke. That means what was sold for just $1 in 2006 really costs $1.20 when inflation is factored in. So home prices aren’t exactly back up to their pre-recession peaks.