U.S. house prices rose 7.4 percent in the year through April, according to the Federal Housing Finance Agency, extending a rebound in real estate values as buyers compete for a tight inventory of homes.
Prices increased 0.7 percent on a seasonally adjusted basis from March, the FHFA said in a report today from Washington. The average economist estimate was for a 1.1 percent gain, according to data compiled by Bloomberg.
Property values are climbing as low borrowing costs and rising consumer confidence lure buyers amid a small supply of homes for sale. The inventory of homes on the market last month was the lowest for any May since 2002, the National Association of Realtors reported last week.
Mortgage rates are on the rise, which may limit buyer demand. The average rate for a 30-year fixed loan was 3.93 percent last week, up from 3.35 percent in May and a record low 3.31 percent reached in November, according to Freddie Mac.
Prices increased 17.1 percent from a year earlier in the Pacific area, which includes California and Oregon. In the Mountain region, including Nevada and Arizona, the gain was almost 15 percent, the FHFA said. The Middle Atlantic area -- New York, New Jersey and Pennsylvania -- had the smallest increase, at 2.9 percent.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. The gauge is 11.7 percent below its April 2007 peak.