U.S. home prices posted another big gain in January, pushed higher by a shortage of homes for sale.
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Standard & Poor's said Tuesday that its S&P CoreLogic Case-Shiller national home price index climbed 6.2 percent in January from a year earlier. That nearly matches December's 6.3 percent gain, which had been the fastest 12-month growth in almost three years. The January increase was in line with economists' expectations.
"The home price surge continues," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
As the spring home-buying season begins, house shoppers are facing higher prices and fierce competition for a limited inventory of available homes. But a strong job market has given American consumers, including an influx of younger millennials, the confidence to shop for homes anyway.
Prices rose 12.9 percent in Seattle, 11.1 percent in Las Vegas and 10.2 percent in San Francisco. Chicago and Washington D.C. posted the weakest annual gains: 2.4 percent each.
The increase in house prices is easily outpacing wage growth and inflation.
Homes for sale are scarce. It would take just 3.4 months to snap up the supply of available homes at the current sales rate, down from an average since 2000 of 6 months.
"Limited supply, fierce competition and rising prices are forcing many buyers to stay on the market longer in hopes of finding the right home at the right price," said Aaron Terrazas, chief economist at the real estate company Zillow. "More inventory is really the only cure for those pressures right now."
Overall, home prices are 6.3 percent higher than their peak in July 2006. Prices plunged when the housing bubble burst, hitting bottom in February 2012. Since then, prices have rebounded 46.5 percent.
Mortgage rates have now risen 10 of the past 11 weeks. But higher interest payments have yet to do much damage to demand for homes. The National Association of Realtors reported last week that sales of existing homes rose 3 percent in February. New-home sales dropped for the third straight month in February, the Commerce Department reported Friday, but are up 2.2 percent year-to-date from 2017.