US house prices accelerate slightly in January, pressured by lack of new build

The rate of US home price gains edged slightly higher at the start of the year, according to one of the most widely-followed barometres of the sector, as a lack of new build continued to boost prices - although there were signs that might be changing.

“The low inventory of homes for sale -- currently about a five month supply – means that would-be sellers seeking to trade-up are having a hard time finding a new, larger home," said David M.Blitzer, Managing Director and Chairman of the index committee at S&P Dow Jones Indices.

Standard&Poor´s Case Shiller home price index rose at a 5.4% year-on-year clip in January.

Narrower gauges for home prices in the ten and twenty main US metropolitan areas advanced by 5.1% and 5.7%, respectively.

When compared to the month before, US home prices were flat according to all of the above gauges.

Versus the same month of a year ago home prices appreciation was quickest in Denver (10.2%), San Francisco (10.5%), Seattle (10.7%) and Portland (11.8%).

Sales and construction of new homes had been lagging the gains seen in existing sales. However, according to Blitzer that might be starting to chance.

Blitzer pointed to starts of single family homes in February at their highest since November 2007 to back up his case.

In parallel, single family homes as a proportion of total starts had recovered from 57% in June 2015 to 70% in February, approaching the 75-80% range seen before the housing crisis, he said.