WASHINGTON — U.S. home prices rose in December at the fastest pace in 11 months as prospective buyers bid against each other for a limited supply of available property.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index increased 5.6 percent from the year before, the biggest increase since January 2016. The U.S. National Home Price NSA Index, a composite that covers all nine Census regions, increased by 5.8 percent--the fastest rate in two and a half years.
The cities of Portland and Seattle showed the fastest increase, with average home prices increasing more than 10 percent from the year before. Denver, Dallas and Tampa, Florida, saw home prices increase by more than 8 percent.
The price gain reflects the healthy pace of home sales, which increased in January to the fastest level in a decade. Steady job gains and growing consumer confidence have encouraged more people to take the plunge and look for a home.
“In short, home prices continue to rise at a solid pace, with no sign of any significant slowing,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. “If anything, the latest data suggest acceleration.”
Still, mortgage rates have risen since last fall, and with prices also increasing, homes are becoming less affordable. A measure of pending home sales declined in January, a sign that final sales may soon fall as well.