Home prices rose in January as shoppers competed for a limited inventory of listings.
Prices increased 0.5% on a seasonally adjusted basis from December, the Federal Housing Finance Agency said Tuesday in a report from Washington. The gain matched the median estimate of 19 economists, according to data compiled by Bloomberg. Prices climbed 6% from a year earlier.
The low number of homes on the market is holding back home sales and driving up prices. Closings on purchases of existing homes decreased 7.1% to a 5.08 million annual rate in February, a three-month low, after a 5.47 million pace in January, the National Association of Realtors reported on Monday.
"There isn't a lot of supply being built and markets are extremely tight," Gennadiy Goldberg, rate strategist for TD Securities USA in New York, said in a phone interview Monday. "We expect prices to be pressured higher."
Prices increased from a year earlier in all regions, led by the South Atlantic — including Maryland, Virginia and the District of Columbia — with an 8.9% gain. Prices climbed 7.4% in the Pacific area, with California, Oregon and Hawaii. The Middle Atlantic region — New York, New Jersey and Pennsylvania — had the smallest increase, 1.7%.
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 specific prices. The median price of an existing single-family home in the U.S. was $215,000 in January, up 8.3% from a year earlier, according to the Realtors group.
