Home Prices Post Highest Annual Gain Since 2006

January Home prices are up 6.2% from a year ago—the largest annual gain since 2006, according to a Zillow Real Estate Market Report released Friday morning.

“The 6.2% annual gain is the largest since July 2006 when home values rose 7.5%,” the new report says.

The Zillow report shows that home prices rose 0.7% from December to January and values are now at June 2004 levels.

"The winter months are typically when things cool off in the housing market, but high demand and continued tight inventory in many markets have helped keep things at a boil through the early part of 2013," said Zillow chief economist Stan Humphries.

He expects home values and rents will continue to rise in 2013 due to high demand.