Surging home prices are a double-edged sword

"Prices ran up so fast in 2013," said John Burns, chief executive of a home-building consulting firm in Irvine, Calif. But even as prices have increased, housing still appears affordable by one traditional gauge. While homes are still affordable on a monthly payment basis because of cheap financing, homes no longer look like a bargain when comparing prices to incomes. Sales of new homes last year rose by 14 percent from 2012, but the number of homes sold for less than $150,000 fell by 28 percent. Sales above $500,000 grew by 36 percent. Does this surging home prices hurt first-timers' ability to become homeowners?

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