WASHINGTON (AP) — A survey shows U.S. home prices rose 10.5 percent in March compared with a year ago, the biggest gain since March 2006.
Core Logic, a real estate data provider, said Tuesday that annual home prices have now increased for 13 straight months. Prices are rising in part because more buyers are bidding on a limited supply of homes for sale.
Prices increased in 46 states over the past year — 11 of them posting double-digit gains. And when excluding distressed sales, which include foreclosures and short sales, prices rose in every state. A short sale is when a home sells for less than what is owed on the mortgage.
Nevada led all states with a 22.2 percent annual gain. It was followed by California (17.2 percent), Arizona (16.8 percent), Idaho (14.5 percent) and Oregon (14.3 percent).
Home prices also rose 1.9 percent in March from February, signaling a solid start to the spring buying season. And 88 of the 100 largest cities reported price gains compared with a year earlier, down slightly from 92 in February.
Prices in Phoenix rose 18.8 percent in March from a year earlier, the largest gain of any city. Los Angeles, Riverside, Calif., Atlanta and Houston posted the next largest gains.
Steady job creation and record-low mortgage rates have boosted home sales and construction in the past year. More demand, along with a limited supply of homes for sale, has pushed prices higher.
The number of homes for sale fell nearly 17 percent in March compared with a year ago. That supply would be exhausted in about 4.7 months at the current sales pace. That's below the 6 months of supply that is typical in a healthy market.
Rising home prices can help sustain the housing rebound and lift the economy. More potential homebuyers may seek to purchase a house before prices rise further. And homeowners are more likely to put their houses on the market once they expect a good price.
Higher home values also boost Americans' overall net worth. That can encourage consumers to spend more, driving more economic growth. Consumer spending accounts for roughly 70 percent of economic activity.