Fannie Mae

Home buyers scramble in a tight real estate market

The housing market is heating up. Existing home sales have jumped to their highest level since early 2007 and new home sale activity has been equally as brisk. In some markets, such as the Bay area or Dallas, house prices have surpassed their previous inflation-adjusted peaks.

Nonetheless, great deals can be had in places like Pittsburgh, Cincinnati, Cleveland and St. Louis, where, according to, the base cost of owning a median-priced home -- including the principal, interest, taxes and insurance payments -- is around $1,000 per month. (The analysis presumes a 20 percent down payment.)

The biggest hurdle for would-be buyers in many...