By Nicole Friedman
Home-price growth accelerated in September, as a widespread shortage of homes for sale spurred competition among home buyers.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 7% in the year that ended in September, up from a 5.8% annual rate the prior month. September marked the highest annual growth rate since May 2014.
Sales of previously owned homes, which make up the bulk of the housing market, rose 9.4% in September from a month earlier to the highest level since 2006, according to the National Association of Realtors. Record-low mortgage rates have increased demand, while the supply of homes for sale has remained low, especially at affordable price points.
"The delayed spring homebuying season fueled sales well into October and past the time when they would normally begin to slow down," said George Ratiu, senior economist for Realtor.com. "As the number of homes for sale keeps shrinking to new record lows, prices will continue to rise at a quick pace."
The Case-Shiller 10-city index gained 6.2% over the year ended in September, compared with a 4.9% increase in August. The 20-city index rose 6.6%, after an annual gain of 5.3% in August.
Economists surveyed by The Wall Street Journal expected the 20-city index to gain 5.6%.
The 20-city index measured 19 cities in September due to transaction reporting delays in Wayne County, Mich., according to S&P Dow Jones Indices. Price growth accelerated in all of the 19 cities.
Phoenix had the fastest home-price growth in the country for the 16th straight month, at 11.4%, followed by Seattle at 10.1%.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 9.1% increase in home prices in September from a year earlier.
News Corp, parent of The Wall Street Journal, operates Realtor.com.
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(END) Dow Jones Newswires