Home prices in the United States climbed again at the start of the year, adding to pressure on buyers in a sellers’ market. Americans are feeling more confident this month, another report released on Tuesday showed, as a rebounding stock market brightened their outlook.
In January, the Standard & Poor’s/Case-Shiller 20-city home price index rose 5.7 percent from a year earlier, a slight increase from the 5.6 percent annual increase in December.
“The pace of U.S. home value growth has been picking up bit by bit over the past few months, driven in large part by stubbornly low inventory in most markets that creates competition and drives up prices for those homes that are available,” said Svenja Gudell, chief economist at the real estate firm Zillow.
Home values have risen at a faster pace than average hourly wages, which have improved just 2.2 percent, according to a government report this month. Tight supplies of homes on the market have propelled much of the price growth, as low mortgage rates and steady hiring have increased demand.
Denver, Portland, San Francisco and Seattle each registered double-digit annual price increases. Home values rose in all 20 metro area markets, which account for roughly half of the housing stock in the country.
The index remains more than 11 percent below its mid-2006 peak, when subprime mortgages pushed the market to heights that set off the recession in late 2007.
Existing homes sold at a seasonally adjusted annual rate of 5.08 million in February, the National Association of Realtors said this month. Sales dipped 7.1 percent from a relatively healthy pace in January, but an increase in the number of signed contracts to buy houses indicates that purchases should rebound in March.
Despite the demand, listings in February declined 1.1 percent from a year ago. Many homeowners are reluctant to sell, because they lack the equity to cover the down payment for upgrading to a new house.
“The low inventory of homes for sale — currently about a five-month supply — means that would-be sellers seeking to trade up are having a hard time finding a new, larger home,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
In a separate report, the Conference Board said that its consumer confidence index rose to 96.2 this month, after tumbling to a revised 94 in February.
Consumers’ assessment of current economic conditions has dipped. But their outlook for the future has improved modestly.
United States markets got off to a dismal start in 2016, driven by fears of economic weakness overseas and plunging oil prices, but they have since recovered most of those losses. This month, 28.7 percent of consumers said they expected stocks to rise over the next year. That was up from 26.9 percent in February, the lowest share since July 2012.
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AP