Home prices rose in December by most in 61/2 years

Associated Press

WASHINGTON

U.S. home prices jumped by the most in 61/2 years in December, spurred by a low supply of available homes and rising demand.

Home prices rose 8.3 percent in December compared with a year earlier, according to a report Tuesday from CoreLogic, a real-estate data provider. That is the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.

Home prices also increased 0.4 percent in December from the previous month. That’s a healthy increase given that sales usually slow over the winter months.

Steady increases in prices are helping fuel the housing recovery. They’re encouraging some people to sell homes and enticing would-be buyers to purchase homes before prices rise further.

Higher prices also can make homeowners feel wealthier. That can encourage more consumer spending.

Most economists expect prices to keep rising this year. Sales of previously occupied homes reached their highest level in five years in 2012 and likely will keep growing. Homebuilders, encouraged by rising interest from customers, broke ground on the most new homes and apartments in four years last year.

Ultra-low mortgage rates and steady job gains have fueled more demand for houses and apartments.