WASHINGTON: 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.
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.
In Akron, home prices, including distressed sales, increased by 5.8 percent in December 2012 compared to December 2011. On a month-over-month basis — from November 2012 to December 2012 — home prices, including what are called distressed sales, increased by 0.1 percent.
Excluding distressed sales, year-over-year prices in Akron increased by 1.6 percent in December 2012 compared to December 2011. On a month-over-month basis, excluding distressed sales, the CoreLogic HPI indicates home prices decreased by 0.1 percent in December 2012 compared to November 2012.
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. Homebuilders, encouraged by rising interest from customers, broke ground on the most new homes and apartments in four years last year.
Low mortgage rates and steady job gains have fueled more demand for houses and apartments. 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,” said Anand Nallathambi, CEO of CoreLogic.
States with the biggest gains were Arizona, Nevada, Idaho, California and Hawaii. The biggest losers 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 2006.
Beacon Journal business writer Katie Byard contributed to this report.