San Diego County median home price soared to its highest point ever, $550,000, in March, said real estate tracker CoreLogic.

Home prices increased 6.8 percent in a year, which experts attribute to a lack of homes for sale and a strong economy. The previous home peak was $545,000 in June.

The big picture: San Diego County’s median home price is technically still down from the height of the housing boom. In November 2005, the median hit $517,500, which is more than $650,000 when adjusted for inflation. The San Diego region is still a cheaper option in coastal Southern California compared to Los Angeles and Orange counties, which also hit new price peaks in March, CoreLogic reported.

What is causing the price increase: A strong economy is fueling demand for homes while the number of houses available remains limited, said Chris Thornberg, economist and founding partner of Beacon Economics. There were 4,857 homes listed for sale in March, said the Greater San Diego Association of Realtors. That is 488 more than March of last year.

Are we in a housing bubble? No. Economists say today's upswing is more sustainable, driven not by risky lending but by an improving economy, low mortgage rates and a shortage of homes for sale. Thornberg said March’s peak should not be viewed as the start of a bubble, which assumes housing prices are very overvalued.

How prices could change: Mortgage rates are rising and that makes the cost to borrow money to buy a home more expensive. The Federal Reserve raised its key interest rate last month and said it would raise rates two more times this year. This indirectly affects mortgage rates, which could make homeownership more expensive in the long run, because rates typically track the yield on the U.S. 10-year Treasury.

How different home types fared: The median for a resale single-family home hit $608,750, a new peak, in March with 2,126 sales. Resale condos were at a median of $418,000 with 1,038 sales, and down from a peak of $425,000 reached in February. Newly built homes were a median of $619,500 with 365 sales, down from a peak of $792,250.

How the rest of Southern California compares: Southern California’s median home price hit a record high of $519,000 in March, increasing 8.4 percent in a year. Orange County had the biggest increase, 8.7 percent, for a median of $725,000. It was followed by San Bernardino County with a 7.5 percent increase for a median of $328,000; Riverside County with a 7.1 percent increase for a median of $375,000; San Diego County with the 6.8 percent increase; Los Angeles County with a 6.6 percent increase for a median of $585,000; and Ventura County with a 6.8 percent with a median of $656,000.

Source: SDuniontribune by Phillip Molnar