The more striking data from Trulia's report highlighted the impact of job growth on home prices. Asking prices leaped the most in cities where the jobs market is booming, suggesting underlying fundamentals behind the housing recovery are strengthening. "Strong job growth and the housing recovery go hand-in-hand," the report said. "Nationally, job growth increased 1.5 percent Y-o-Y in March. In San Jose, Orange County, San Francisco, and Phoenix -- where asking prices rose more than 18 percent Y-o-Y -- job growth was well above the national average. In fact, only the Detroit suburb of Warren-Troy-Farmington Hills, MI was among the list of top 10 markets with the highest price gains without above average job growth." Meanwhile rents rose 2.4% nationally, the pace of rent growth has slowed, which is good news for renters who are still unable to afford homes. In the cities of San Francisco, Las Vegas, Sacramento and Seattle, rents are declining even though home prices are increasing at a scorching pace.
The housing recovery is welcome news for sellers waiting on the sidelines and underwater homeowners waiting for a recovery. But it has its share of skeptics. The most cited argument is that the housing recovery is being driven by investor demand, with most first-time home buyers still largely cut off from the market due to tight mortgage credit conditions. Still, recent reports show that
The improving job market is also likely to encourage young adults with jobs to move out of their parents' homes and form new households, which will then get them thinking about home ownership, he said, highlighting the classic virtuous cycle that plays out in a housing recovery. -- Written by Shanthi Bharatwaj in New York. >Contact by Email. Follow @shavenk