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US home prices rose 5.8% in fourth quarter from prior year

[WASHINGTON] US home prices rose 5.8 per cent in the fourth quarter from a year earlier as buyers competed for a tight supply of listings.

Prices climbed 1.4 per cent on a seasonally adjusted basis from the previous three months, the Federal Housing Finance Agency said in a report Thursday from Washington.

Improving employment has helped bring more buyers into a market with fewer choices. There were 1.79 million previously owned homes for sale at the end of the fourth quarter, down 3.8 per cent from a year earlier, according to the National Association of Realtors. The average supply for the quarter was 4.6 months. Less than five months is considered a tight market, the Realtors group has said.

"Instability in financial markets did not seem to put much of a drag on home prices in the fourth quarter," Andrew Leventis, the FHFA's supervisory economist, said in a statement. The increase from the previous three months "was in line with the extremely steady - but historically elevated - appreciation rates we have been observing for several years now."

Prices in December rose 0.4 per cent on a seasonally adjusted basis from November, according to the FHFA. The average estimate of 19 economists surveyed by Bloomberg was for a 0.6 per cent gain.

In the fourth quarter, prices rose from a year earlier in every state and the District of Columbia. Nevada had the biggest gain, at 12.7 per cent.

The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn't provide specific prices. The median price of an existing single-family home in the US was $222,700 in the fourth quarter, up 6.9 per cent from a year earlier, according to the Realtors group.