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Home Prices Climb At Fastest Rate Since 2006

Home Prices Climb At Fastest Rate Since 2006

The US housing market is continuing to increase in strength and is growing at its fastest pace in almost 7 years. The S&P/Case-Shiller index of property values in 20 cities increased 8.1 percent in January from the same month in 2012. This was already after a rise of nearly 7 percent for the year ended in December. Economists had forecasted an increase of only 7.9 percent.

Home prices when adjusted for seasonal variations rose 1 percent in January. This was after a prior month increase of 0.9 percent in December. Homes prices continue to rise in formerly depressed markets having their biggest adjusted monthly increases in areas like Atlanta, Las Vegas, Phoenix and San Francisco.

Pre-existing home inventories continue to decrease and were at their lowest since 1999 at 1.77 million according to data from the National Association of Realtors. The total supply of homes on the market rose to 1.94 million in February. The average amount of available housing units was 3 million for the five years prior to the 2007-2009 recession.

The median value of a previously-owned home increased 11.6 percent to $173,600 in February from the same month in 2012. This is the largest gain since November 2005 according to pricing data provided by the National Association of Realtors.

All-time low interest rates and increased demand are driving up housing prices and decreasing inventories. This is leading to more consumers, tired of sitting on the sidelines, to get back into the housing market. There have been a few stops and starts to the housing recovery but it is looking like this time it might last.

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