By Christopher S. Rugaber
WASHINGTON -- U.S. home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006. A growing number of buyers are bidding on a tight supply of homes, driving prices higher and helping the housing market recover. The Standard & Poor's/Case-Shiller home price index released Tuesday also showed that all 20 cities measured by the report posted annual gains for the third straight month. And prices rose in 15 cities in March from February. That's up from only 11 in the previous month. The monthly figures aren't seasonally adjusted and may reflect the beginning of the spring buying season.
Annual prices rose in Phoenix by 22.5 percent, the biggest gain among cities. It was followed by San Francisco (22.2 percent) and Las Vegas (20.6 percent). New York City had the smallest annual increase at 2.6 percent, followed by Cleveland at 4.8 percent.
The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The March figures are the latest available.
The U.S. housing market is steadily recovering, buoyed by solid job gains and near-record low mortgage rates. Sales of new homes rose in April to nearly a five-year high. And sales of previously occupied homes ticked up in April to the highest level in three and a half years. Despite the gains, a limited number of homeowners are putting their houses on the market. That's helped lift home prices. And it's made builders more willing to ramp up construction. Applications for building permits rose in April to the highest level in nearly five years.
The recovery is creating more construction jobs and bolstering the economy in other ways. Higher home prices make homeowners feel wealthier and encourages them to spend more.
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More on home prices:
New Home Sales Up 2.3% in April as Median Price Hits Record High
Homes Selling as Fast as They Did During Housing Boom
Spring Homebuying 'Stuck' Under Tight Inventory, NAR Says
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