A consumer's home purchase power only fell by 0.2% in February from January because wage growth has somewhat offset price increases.
A lack of homes for sale increased the First American Real House Price Index by 0.7% from January and by 11% from February 2016 to 90.32.
The index measures home price movements adjusted for income and interest rate changes. The baseline is 100, set on January 2000 data.
On a year-over-year basis, consumer purchase power fell by 4.7%.
"The lack of homes listed for sale is causing unadjusted house price growth to remain strong. Additionally, increasing interest rates are reducing consumer purchasing power. The result is a substantial year-over-year increase in the real price of homes," said First American Chief Economist Mark Fleming in a press release.
Even though on an unadjusted basis, home prices grew 5.7% from February 2016, this was partially offset by growth in wages at an annual pace of 2.8%.
"Most of the markets we follow experienced double-digit real house price increases in February, compared with a year ago. The main story in most markets this spring is the lack of supply."
"Combined with unfaltering demand, the lack of supply continues to pressure unadjusted prices higher in one of the strongest spring sellers' markets seen in recent memory. Even so, it's important to note that wages continue to grow and the level of affordability in most markets remains high by historical standards," said Fleming.
Among the markets tracked by First American, the five with the largest year-over-year increase in their RHPI are Jacksonville, Fla. (20.6%), Milwaukee (17.3%), Charlotte, N.C. (16.5%), Cincinnati (16.3%) and Denver (15.4%).
At the other end of the spectrum, the smallest year-over-year increases were seen in Virginia Beach, Va. (5.3%), Hartford, Conn. (5.5%), Pittsburgh (6.3%), San Francisco (6.6%) and Boston (8.2%).