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Here's what is pushing up U.S. home prices

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The 10 hottest U.S. real estate markets in 2017 01:15

When it comes to buying a home in the U.S., the tide is turning in favor of sellers.

The typical residential property that's up for sale currently stays on the market for 77 days, according to Zillow -- that's the shortest listing time since the real estate service started tracking the data. While demand for homes is robust, the inventory of available properties has shrunk 9 percent on a year-over-year basis, the biggest drop since 2013. Around the U.S., the hardest markets in which to find a home are Columbus, Ohio, Minneapolis and San Jose, California.

Housing prices are on the rise in many markets. The median price for all homes in May, including new and existing properties, was $252,800, according to the National Association of Realtors. That's up 5.8 percent from the year-earlier period, with home prices rising 63 months in a row. The median home value is $199,200, up 7.4 percent since this time last year, according to Zillow. 

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The median sale price of a new home in May was $345,800, an increase of nearly 17 percent from a year ago, according to federal data released Friday. The average price was $406,400, up 16 percent.   

Of the 35 largest metro areas around the country, Seattle, Dallas and Tampa have seen the greatest increase in value over the last year -- each has posted more than double-digit percentage gains.  

According to Zillow, the number of owner-occupied single-family homes fell by 680,0000 between 2005 and 2016, while the number of rental properties surged by 6.2 million. There isn't enough new housing being built to make up for the shortfall. In fact, housing starts have fallen for three straight months. New homes are often beyond the budgets of entry-level buyers. Rental homes also come up for sale less frequently, tightening inventories further.  

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Renters are also facing higher housing costs, with monthly payment increasing 0.7 percent over the past year, Zillow data show. Seattle and Sacramento, California, saw the largest increases.

Still, not all markets have come roaring back, with many regions still feeling the effects of the 2008 housing crash. Many former homeowners were forced to become renters when the economy experienced its worst slowdown since the Great Depression. "Underwater" mortgages -- in which homeowners owe more on their loans than properties are worth -- also continue to discourage some buyers from entering the market in hard-hit areas, according to Zillow.  

Experts say a repeat of the housing bubble is unlikely because mortgages are harder to get and require larger down payments. Buyers who have acquired their properties within the past few years also may be reluctant to sell now that the Federal Reserve has started raising interest rates.

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