Home prices increased less than economists estimated in January as traditional buyers took the place of investors, leading to smaller gains.
Prices climbed 0.3% on a seasonally adjusted basis from December, the Federal Housing Finance Agency said in a report from Washington on Tuesday. The average economist estimate was for a 0.6% increase, according to data compiled by Bloomberg.
After the U.S. residential real estate crash, prices began rising as investors bid up values for foreclosures. Now, fewer distressed properties are available and the market is increasingly dependent on traditional buyers.
"Home prices are no longer rebounding from the huge price declines of the housing bust," Jed Kolko, chief economist for San Francisco-based real estate researcher Trulia, said in an email. "Instead, home-price gains are more closely tied to job growth, which makes increases slower but more sustainable."
Home prices increased 5.1% in January from a year earlier, according to the FHFA. The U.S. gauge is 3.5% below its March 2007 peak and about the same as the December 2005 level.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn't provide a specific price for homes.
The median price for an existing single-family home in February was $204,200, up 8.2% from a year earlier, according to the National Association of Realtors.
