2017.02.2809:21:00UTC+00U.S. Home Price Growth Accelerates In December

A report released by Standard & Poor's on Tuesday showed a substantial acceleration in the pace of home price growth in major U.S. metropolitan areas in the month of December.

The report said the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index jumped by 5.6 percent year-over-year in December compared to the 5.2 percent increase in November.

Economists had expected the annual rate of home price growth to come in unchanged compared to 5.3 percent increase originally reported for the previous month.

The 20-City Composite Home Price Index climbed by seasonally adjusted 0.9 percent month-over-month in December, matching the increase seen in November.

On a non-seasonally adjusted basis, the index rose by 0.3 percent in December after edging up by 0.2 percent in the previous month.

The report also said the S&P CoreLogic Case-Shiller U.S. National Home Price Index was up by 5.8 percent year-over-year.

"Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years," said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.

He added, "With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural."

On Monday, the National Association of Realtors released a separate report unexpectedly showing a steep drop in pending home sales in the month of January.

NAR said its pending home sales index tumbled by 2.8 percent to 106.4 in January after climbing by 0.8 percent to a revised 109.5 in December.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The steep drop by the index came as a surprise to economists, who had expected pending home sales to increase by 0.8 percent.

With the unexpected decrease, the pending home sales index fell to its lowest level since hitting 106.0 in January of last year.