U.S. Home Prices Rose in December by Most Since May 2006

Home PricesBY CHRISTOPHER S. RUGABER

WASHINGTON-- U.S. home prices jumped by the most in 6½ years in December, spurred by a low supply of available homes and rising demand.

Home prices rose 8.3 percent in December compared with a year earlier, according to data Tuesday from CoreLogic, a real estate data provider. That is the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.

Home prices also rose 0.4 percent in December from the previous month. That's a healthy increase given that sales usually slow over the winter months.

Steady increases in prices are helping fuel the housing recovery. They're encouraging some people to sell homes and enticing some would-be buyers to purchase homes before prices rise further.

Higher prices can also make homeowners feel wealthier. That can encourage more consumer spending.

Most economists expect prices to keep rising this year. Sales of previously-occupied homes reached their highest level in five years in 2012 and will likely keep growing. Home builders, encouraged by rising interest from customers, broke ground on the most new homes and apartments in four years last year.

Ultra-low mortgage rates and steady job gains have fueled more demand for houses and apartments. More people are moving out into their own homes after doubling up with friends and relatives in the recession.

At the same time, the number of previously-occupied homes for sale has fallen to the lowest level in 11 years.

"All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery," said Anand Nallathambi, CEO of CoreLogic.

The states with the biggest price gains were Arizona, Nevada, Idaho, California, and Hawaii. The four states where prices fell were Delaware, Illinois, New Jersey and Pennsylvania.

The housing recovery is also boosting job creation. Construction companies have added 98,000 jobs in the past four months, the best hiring spree since the bubble burst in 2006. Economists forecast even more could be added this year.

Housing has been a leading driver of past recoveries. But the bursting of the housing bubble pushed a flood of foreclosed homes on the market at low prices. That made it hard for builders to compete.

And a collapse in home prices left millions of homeowners owing more on their mortgages than their houses were worth. That made it difficult to sell.

Now, six years after the bubble burst, those barriers are fading. Some economists forecast that housing could add a point or more to economic growth this year.



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croone22

Stop creating false euphoria inducing figures that are contrived and misleading. The housing market in this country is still in the tank. Identify the increases you site by location, type of homes, and details from which true indications can be drawn. There are still millions of homes in the foreclosure process while homebuilders continue to build more homes because that's all they know how to do. This is the same incompetent gibberish that got us in the economic mess we are in. And it ain't gonna get any better until we get political leaders qualified to run this country which is now sinking into economic abyss.

February 05 2013 at 4:49 PM Report abuse -1 rate up rate down Reply
1 reply to croone22's comment
chris1011

Eternal pessimist that you are, I'm betting that you sold at the bottom of the market and are now quite upset that it's revovered quite nicely and bumping ino the 14,000 level. Admit it, ya lost out, and now you're a whiner, am I right?

February 05 2013 at 5:59 PM Report abuse rate up rate down Reply
cpo1514

Is Barney Frank in real estate with Chris Dodd as the bank?????

February 05 2013 at 4:01 PM Report abuse rate up rate down Reply
1 reply to cpo1514's comment
setanta_1

and both SPOS walked away,free.
diMs lied and the economy died.

February 05 2013 at 9:20 PM Report abuse -1 rate up rate down Reply
hemipwr54

Market was bad yesterday, 24 hours later and everything is fine again, AMAZING isn't it.

February 05 2013 at 1:49 PM Report abuse +1 rate up rate down Reply
1 reply to hemipwr54's comment
cpo1514

Little Timmy to the rescue... its good to have a printing press....

February 05 2013 at 4:02 PM Report abuse rate up rate down Reply
hemipwr54

And the bubble starts its ascent again, growing larger and then pop.
Home values are based off now Bernanke feels in that given month. FED, yes we are FED UP with this clown's game of finance.

February 05 2013 at 1:47 PM Report abuse +1 rate up rate down Reply
1 reply to hemipwr54's comment
chris1011

Then don't buy a house. And don't invest in the market. By the way, why are you here annyhow?

February 05 2013 at 6:01 PM Report abuse +1 rate up rate down Reply