(CN) – Home prices across the U.S. rose 6.2 percent in January, with Seattle, Las Vegas and San Francisco seeking the highest year-over-year gains, Standard & Poor’s reported Tuesday.
The financial services company’s latest S&P CoreLogic Case-Shiller national home price index is in line with economists’ expectations.
The 6.2 percent year-over-year gain in January, comes after a 6.3 percent gain in December, which had been the fastest 12-month growth in almost three years.
The index measures home prices in 20 U.S. cities. In January, Seattle led the way with a 12.9 percent year-over-year price increase, followed by Las Vegas with an 11.1 percent increase and San Francisco with a 10.2 percent increase.
Twelve of the 20 cities reported greater price increases in the year ending January 2018 compared to the year ending December 2017.
“The home price surge continues,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Since the market bottom in December 2012, the S&P CoreLogic Case-Shiller national home price index has climbed at a 4.7 percent real – inflation adjusted – annual rate.
“That is twice the rate of economic growth as measured by the GDP. While price gains vary from city to city, there are few, if any, really weak spots,” Blitzer said.
Even Chicago and Washington, the cities with the smallest price gains, saw a 2.4 percent annual increase in home prices.
Blitzer said two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing.
“Despite limited supplies, rising prices, and higher mortgage rates, affordability is not a concern. Affordability measures published by the National Association of Realtors show that a family with a median income could comfortably afford a mortgage for a median priced home,” he said.
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.