Home prices jump nationwide; buyers face paying more now or higher interest rates later

The U.S. housing market has taken a sharp upward turn, trapping homebuyers in a Catch-22: pay significantly more for a property than just a year ago or wait and risk paying a higher interest rate.

Asking prices for existing homes shot up by 10 percent year-over-year nationwide in February because of low inventory and higher demand as a result of rising rents and falling interest rates, the Wall Street Journal reported.

The country added about 1.3 million households annually during a 10-year period ending in 2007, according to data provided to the Journal by Altos Research, an analytics firm in Mountain View, Calif.

The pricing rise will likely mean few affordable properties for many house hunters, but experts insist the uptick doesn’t signal another property bubble: “The recovery is solid. There are pure fundamentals you can point to,” John Burns, CEO of a real estate consulting firm based in Irvine, Calif., said. [WSJ] – Katherine Clarke