U.S. house prices rose 7.2 percent in the year through March, the biggest gain since May 2006, the Federal Housing Finance Agency said.
Prices increased 1.3 percent on a seasonally adjusted basis from February, the FHFA said in a report today from Washington. The average economist estimate was for a 0.8 percent gain, according to data compiled by Bloomberg.
Home prices are climbing as job growth and low mortgage rates fuel demand for a tight inventory of listings. Sales of previously owned U.S. homes rose in April to the highest level in more than three years as the housing recovery gained momentum, the National Association of Realtors said yesterday.
“The housing market has stabilized in many areas and homebuilding activity has strengthened in recent quarters,” FHFA Principal Economist Andrew Leventis said in the statement. “That said, labor market weakness and still-elevated foreclosure pipelines remain hindrances to a more robust recovery.”
Prices jumped 16.1 percent from a year earlier in the Pacific area, which includes California, Washington and Oregon. In the Mountain region, including Arizona, Colorado and Nevada, the gain was 14.4 percent, the FHFA said. The Middle Atlantic area -- New York, New Jersey and Pennsylvania -- had the smallest increase, at 1.6 percent.
In the first quarter, U.S. prices rose 6.7 percent from a year earlier and 1.9 percent from the previous three months.
The FHFA report is based on changes in real estate values using purchases of properties with mortgages backed by Fannie Mae or Freddie Mac. It doesn’t provide a specific price for homes.