Buyers are rushing into the U.S. housing market to take advantage of falling borrowing costs. Now, they’re facing rising prices.

The median price of an existing single-family home gained 6.6% in the fourth quarter, hitting $274,900, according to the National Association of Realtors. That was the biggest year-over-year gain in nearly three years. By comparison, the annual gain in the third quarter was 5.1%.

Key Insights

• Buyers are jumping into the housing market to take advantage of low rates after a spike in borrowing costs in late 2018 caused a slow down.
• Prices are jumping in high-profile markets as well as cities that have been considered more affordable. Trenton, New Jersey, values increased 18.2%, while they climbed 14% in Boise, Idaho, and 11% in Albuquerque, New Mexico.
• While most expensive cities had increases, prices in San Jose, California, which faces an affordability crisis, fell 0.3% to $1.25 million. Elsewhere in California, prices climbed 3.9% in San Francisco, 4.6% in San Diego and 7.2% in Los Angeles. On Long Island, Nassau County saw prices rise 3.7%.