And while a healthier economy is putting more money in consumers' pockets, house price appreciation continues to outpace income and wage growth. Increases in mortgage rates are also creating even more affordability challenges for house hunters.
While home prices in some cities have remained steady or even declined from a year ago, "real" home prices in markets like San Jose have shot up nearly 20%, according to a First American Financial Corp. analysis of home values that factors in local wages and mortgage rates in large cities.
On average, real house prices grew 8.8% annually in April, but areas like Las Vegas saw nearly double the national trend, with home prices increasing over 15%. The nation's RHPI is up 0.5% from March.
With the overall housing market plagued by a shortage of supply, demand for housing continues putting upward pressure on house values at a time when mortgage rates are also rising. This paves the way for dwindling purchasing power in some of the country's hottest housing markets.
Here's a look at 12 housing markets where homebuyer purchasing power is plunging. The data, from the First American Real House Price Index, measures home price changes, taking local wages and mortgage rates into account "to better reflect consumers' purchasing power and capture the true cost of housing." The "house buying power" reflects the price a typical buyer in that market can afford, based on local wages and interest rates. The April 2018 data is ranked by RHPI value, where a reading of 100 is equal to conditions in January 2000.
Aerial image of sports arenas at Downtown Atlanta GA
Felix Mizioznikov - stock.adobe.com
No. 12 Atlanta, Ga.
Median sale price: $212,000 RHPI: 76.1 Year-over-year RHPI: 8.56%
Boston, Massachusetts - July 13, 2013: The historic 1713 Old State House at the corner of State and Washington Streets is a landmark site on the Freedom Trail
Picasa/lspi138 - stock.adobe.com
No. 11 Boston, Mass.
Median sale price: $427,120 RHPI: 88.83 Year-over-year RHPI: 9.36%
Columbus, Ohio beyond The Ohio State University
aceshot - stock.adobe.com
No. 10 Columbus, Ohio
Median sale price: $179,500 RHPI: 61.52 Year-over-year RHPI: 9.76%
Orlando skyline fom lake Eola in Florida USA
TONO BALAGUER/lunamarina - Fotolia
No. 9 Orlando, Fla.
Median sale price: $218,000 RHPI: 94.21 Year-over-year RHPI: 9.81%
Minneapolis Minnesota Downtown and the Stone Arch Bridge at Sunset
Adahm Faehn/Scruggelgreen - stock.adobe.com
No. 8 Minneapolis, Minn.
Median sale price: $251,954 RHPI: 91.07 Year-over-year RHPI: 9.86%
Delmas Lehman - Fotolia
No. 7 Tampa, Fla.
Median sale price: $193,000 RHPI: 76.17 Year-over-year RHPI: 9.96%
unknown/Dave Newman - stock.adobe.com
No. 6 Nashville, Tenn.
Median sale price: $230,000 RHPI: 105.42 Year-over-year RHPI: 10.61%
Skyline of Uptown Charlotte, North Carolina.
Alex Grichenko/digidreamgrafix - stock.adobe.com
No. 5 Charlotte, N.C.
Median sale price: $212,000 RHPI: 75.23 Year-over-year RHPI: 10.66%
Earl Robbins - stock.adobe.com
No. 4 Jacksonville, Fla.
Median sale price: $204,500 RHPI: 97.39 Year-over-year RHPI: 11.13%
Afternoon Traffic in the Streets of Downtown Seattle on a Sunny Day
Ryan C Slimak Photography/ryancslimakphoto - stock.adobe.com
No. 3 Seattle, Wash.
Median sale price: $474,623 RHPI: 96.19 Year-over-year RHPI: 12.24%
Famous Las Vegas sign on bright sunny day
Elnur Amikishiyev/Elnur - Fotolia
No. 2 Las Vegas, Nev.
Median sale price: $250,000 RHPI: 86.47 Year-over-year RHPI: 15.07%
Yuval Helfman/Yuval Helfman - stock.adobe.com
No. 1 San Jose, Calif.
Median sale price: $1,150,000 RHPI: 143.75 Year-over-year RHPI: 19.27