US home prices rise in December

“Inventory, which has fallen to its lowest level since December 2013, is squeezing out buyers who either can’t get into homes fast enough, or aren’t willing to partake in a bidding war against dozens of other buyers and watch the price escalate even higher”, said Nela Richardson, Redfin’s chief economist.

Home values in 20 USA cities steadied in the year ended December, putting residential real estate on healthier footing to contribute to the economic expansion.

NAR determined the median existing-home price for all housing types in January was $213,800, an 8.2 percent year-over-year spike and largest price increase since the 8.5 percent rise in April 2015.

Unadjusted, values were little changed after rising 0.1 percent in November. Portland led the way with an 11.4 percent rise, followed by San Francisco with 10.3 percent and Denver with a 10.2 percent. Washington showed the smallest increase, at 1.7 percent.

The report also showed that monthly price growth in the Cleveland area inched up at the end of the year. The S&P/Case-Shiller index is based on a three-month average, which means the December figure was also influenced by transactions in November and October. It is the only market where price increases aren’t topping the pace of inflation. Year-over-year, seven cities saw the rate of price increases wane.

Nationally, prices in the 20-city index climbed 0.8 percent over the month in December, slowing a bit from a 1 percent increase in November.

Demand for homes is likely to spur more new construction, which has lagged behind in this recovery. At 4.9 percent, the unemployment rate fell to an eight-year low in January while average hourly earnings rose more than estimated after climbing in the year to December by the most since July 2009.

“Total housing starts have stayed above an annual rate of one million starts per year since last March and single-family home have been higher than 700,000 units at annual rates since June”.