WASHINGTON — U.S. home prices rose at a faster pace in February than the previous month, driven by higher sales and a limited supply of available houses.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 5 percent in February from 12 months earlier, S&P said Tuesday. That is up from a 4.5 percent pace in January.
Faster sales likely drove the price gain. Signed contracts to buy homes jumped in February, yet the number of Americans listing their homes for sale remains low. That has led to bidding wars in some cities.
February’s annual price increase was the largest in six months. Yet home prices are increasing at a more sustainable pace than in the past two years, when they rose at a double-digit pace for 14 straight months.
All 20 cities in the index reported year-over-year price gains in February. Home prices in Denver jumped 10 percent, the most of any city, followed by San Francisco with 9.8 percent. Denver is one of two cities, along with Dallas, where prices have surpassed their previous peak during the housing boom. Prices nationwide are 10 percent lower than the July 2006 peak.
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 February figures are the latest available.
Home sales rose at a healthy 6.1 percent pace in March to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors reported last week. That suggested the housing market may be returning to solid ground as the spring buying season gets underway.
Yet there aren’t many homes on the market, limiting options for would-be buyers. Nationwide, the number of homes for sale is equal to 4.6 months of sales, below the six months that is typically available in a healthy housing market.
Building more new homes would help boost supply, but home construction has been weak. Developers are focused increasingly on building more expensive homes for wealthier buyers and on apartments.
Steady home price gains are likely pricing many Americans out of the market. Paychecks are rising at a much slower pace than price increases, even as employers have stepped up hiring in the past year.