Business

Home prices rise the most since ’06

WASHINGTON — US 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 a report 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.

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Home prices also increased 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 would-be buyers to purchase homes before prices rise further.

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

Most economists expect prices to keep rising this 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 in the recession.

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

Associated Press

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