Housing prices are booming in the Northwest

The 20 city-index, which covers major metropolitan areas like Seattle and Chicago, rose by 5.27%, above economists' expectations of 5.03%, and up from 5.1% in October.

Seattle (+10.4%), Portland (10.1%), and Denver (+8.7%) continued to see the largest annual gains.

Meanwhile, the overall National Home Price Index, which measures all nine US census divisions, rose by 5.6% on an annual basis, up from 5.5% in October.

"National home prices continue to grow at a rapid clip, largely driven upward by the now-familiar forces of high demand from home buyers and limited supply of homes available for sale," Svenja Gudll, Zillow chief economist said after the report.

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10 US cities at risk of a housing bubble
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10 US cities at risk of a housing bubble

#10: Portland, Oregon

Median list price: $428,600
Bubble index compared with 2001: +6%
Bubble index compared with market peak: -26%

Photo credit: Getty

#9: Charleston, South Carolina 

Median list price: $322,300
Bubble index compared with 2001: +7%
Bubble index compared with market peak: -20%

Photo credit: Getty

#8: Buffalo, New York

Median list price: $159,900
Bubble index compared with 2001: +7%
Bubble index compared with market peak: -1%

Photo credit: Getty

#7: Fresno, California

Median list price: $272,100
Bubble index compared with 2001: +9%
Bubble index compared with market peak: -31%

Photo credit: Getty

#6: Los Angeles, California

Median list price: $690,000
Bubble index compared with 2001: +10%
Bubble index compared with market peak: -35%

Photo credit: Shutterstock

#5: Dallas, Texas

Median list price: $335,000
Bubble index compared with 2001: +13%
Bubble index compared with market peak: -2%

Photo credit: Getty

#4: Salt Lake City, Utah

Median list price: $347,200
Bubble index compared with 2001: +14%
Bubble index compared with market peak: -20%

Photo credit: Getty

#3: Austin, Texas

Median list price: $400,000
Bubble index compared with 2001: +17%
Bubble index compared with market peak: -1%

Photo credit: Getty

#2: San Francisco, California 

Median list price: $855,000
Bubble index compared with 2001: +19%
Bubble index compared with market peak: -26%

Photo credit: Getty

#1: San Jose, California 

Median list price: $981,500
Bubble index compared with 2001: +19%
Bubble index compared with market peak: -18%

Photo credit: Getty

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"But even as the pace of home value growth keeps rising, growth in rents is flattening out and stabilizing, which – combined with a series of other factors – will likely begin impacting the for-sale market sooner or later."

Though home prices are back at levels seen in the most recent housing bubble, economists contend that speculation and euphoria are not driving the market this time.

Home prices have been rising as a healthy jobs market and historically low mortgage rates have increased demand for homeownership since the financial crisis. Also, constrained supply helped to bid up the prices of existing homes, especially in desirable East Coast and West Coast cities.

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