The bubble in the US housing market will spread to other states as prices continue to rise, American Express predicted on Tuesday.

At present, values are racing away in the northeast, California and Hawaii, which were the major hotspots in the 1980s housing boom. In some parts prices have doubled in the last five years, compared to an average 50 per cent increase for the US as a whole. There have also been strong gains in Nevada, Maryland, Florida and Virginia.