US Home Prices March Upward As Buyers Fight Over Low Supply

 

WASHINGTON (AP) — U.S. home prices rose in April from a year earlier, lifted by bidding wars in many cities where would-be buyers fought over a sparse supply of homes.

The S&P CoreLogic Case-Shiller 20-city home price index moved up 6.6 percent from a year earlier, led by outsize gains in Seattle, Las Vegas and San Francisco. All three cities showed double-digit increases.

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Prices rose even as home sales fell and mortgage rates climbed. Sales of existing homes dropped in April and May and are now running 3 percent below their year-ago level. Fewer homes are available — the supply has fallen 6.1 percent in the past year — and they are selling quickly.The average house for sale remained on the market for just 26 days in April, down from 39 a year ago.

Mortgage rates reached a seven-year high of 4.77 percent in late May before declining this month. Last week, the 30-year fixed mortgage rate averaged 4.57 percent, according to Freddie Mac. That is still much higher than a year ago, when it was 3.9 percent.

The economy is growing and the unemployment rate is at an 18-year low, which typically would point to stronger home sales. Americans are increasingly turning to newly-built homes, where sales jumped 6.7 percent in May. But higher prices and fewer existing homes to choose from are cutting many Americans out of the housing market.

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Prices rose at a healthy pace in Denver, where they were 8.6 percent higher than a year ago; Los Angeles, where they were 8.3 percent higher; and San Diego, 7.8 percent.

The smallest gains were in Chicago, up 3 percent; Washington, D.C., up 3.2 percent; and New York, up 4 percent.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The April figures are the latest available.

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– by Christopher Rugaber, AP reporter

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