Does America’s hot housing market still need propping up?

“TRULY EXTRAORDINARY.”SPGDP That was how Craig Lazzara of & Global, the firm that compiles a widely watched measure of house prices in America, described its reading for the month of April, released on June 29th. House prices rose by 14.6% year over year, the fastest rate in the 34-year history of the index (see chart, top panel). Houses listed for sale are on average snapped up in just 17 days, a record low. On Reddit, a social-media site, would-be buyers bemoan missing out on house after house because they are unwilling to forgo inspecting the property on which they plan to spend hundreds of thousands of dollars, something that most successful buyers are apparently doing.The Federal Reserve still has monetary policy on ultra-loose mode. Interest rates are anchored at zero and the central bank is buying $120bn-worth of assets each month—$80bn of Treasuries and $40bn of mortgage-backed securities—in order to depress long-term interest rates. This stance is in many ways still justified. There are 7.6m fewer jobs in America than there were before the pandemic. A large minority of adults remains unvaccinated. And yet consumer-price inflation has climbed to an annual rate of 4.9%, and commodities and labour are in short supply. A real-time estimate of economic output compiled by the Federal Reserve Bank of Atlanta puts annualised growth in the second quarter at a heady 8.3%. If true, America has recovered all the output lost during the pandemic and even added more.