Mortgage applications had been lower for much of the summer, and refinances continue to fall, but applications to purchase a home rose 2 percent last week from the previous week, according to the Mortgage Bankers Association.

This, even as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $417,000 or less increased to 4.8 percent, the highest since April 2011. They are still down 6 percent in the past month. Mortgage rates, however, have been moving lower this week on weak economic data.

Higher home prices could also be hurting potential sales, as very low inventories continue to cause bidding wars from coast to coast. Inventories of existing homes are down significantly in most of the nation’s major housing markets.

(Read more: Map: Tracking the recovery)

San Francisco, for example is seeing some of the highest home price appreciation, as listings were down 29 percent in July year over year, according to the California Association of Realtors.

“More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems,” Yun said.

Single family housing starts were down 2.2 percent in July month to month, as home builders still struggle to find finished lots and skilled labor. Underlying demand is running nearly twice the rate of housing completions, according to IHS Global Insight. Some home builders admit they are slowing production in order to gain pricing power.

(Read more: Home prices across the US defy gravity)

Article source: http://www.cnbc.com/id/100993579

In its monthly report on housing prices, the SP/Case-Shiller Home Price Index — considered to be the leading measure of home prices across the country — said Tuesday the average selling price for a home in the San Francisco area jumped 23.9 percent over a 12-month period ending in April.

Jed Kolko, Trulia’s chief economist, told SFBay home prices in the East Bay showed even more dramatic increases:

“Trulia’s Price Monitor, which is a forward-looking indicator of price trends based on asking prices and reports the San Francisco and Oakland areas separately, showed prices up 31 percent in the East Bay year-over-year, the biggest increase among the 100 largest metros in the country.”

Kolko said home prices in other Bay Area counties also increased, but not as much as the East Bay:

“Prices in our San Francisco metro area, which includes San Mateo and Marin counties, were up 20 percent year-over-year, which is also a very steep increase but not as steep at the East Bay gain.”

Though the housing market is rebounding in most cities, a tight inventory of homes across the Bay Area and one of the fastest job growth rates in the nation is helping to boost home prices locally.

And as Kolko points out, home prices in the East Bay saw prices fall sharply during the bust, creating bargains for home buyers.

SP/Case-Shiller says nationwide prices the average price for a home during that same period of time ending in April jumped 12.1 percent — setting a monthly record.

David Blitzer, chairman of the index committee at SP Dow Jones Indices said the housing recovery is looking strong:

“Atlanta, Las Vegas, Phoenix and San Francisco posted year-over-year gains of over 20 percent in April. San Francisco was the highest at 23.9 percent. … Recent economic data on home sales and inventories confirm the housing recovery’s strength.”

Behind San Francisco in showing strong growth was Las Vegas, which saw prices climb  22.3 percent and Phoenix, which saw prices rise by 21.5 percent.

Article source: http://sfbay.ca/2013/06/25/housing-boom-sends-bay-area-home-prices-soaring/