Home prices in the U.S. started 2018 on the rise, outpacing the rate of economic growth.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index reported a 6.2% annual gain in January, down slightly from 6.3% in December. The 20-city composite rose 6.4% from a year ago, and after seasonal adjustment it posted a 0.8% month-over-month increase, beating analysts estimates of 0.6%. Low inventory of homes for sale continued to drive prices.

“Since the market bottom in December 2012, the S&P Corelogic Case-Shiller National Home Price index has climbed at a 4.7% real – inflation adjusted – annual rate,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones in a press statement. “That is twice the rate of economic growth as measured by the GDP. While price gains vary from city to city, there are few, if any, really weak spots.”

Seattle, yet again, led the 20-city index, up 12.9% in January from a year ago. Las Vegas and San Francisco followed, up 11.1% and 10.2%, respectively.

Blitzer noted that it will take 3.4 months to absorb homes for sale, far below the average since 2000 of six months and the high in July 2010 of 11.9 months. He also contributed price increases to low vacancy rates among owner-occupied housing.

“Currently, the homeowner vacancy rate is 1.6% compared to an average of 2.1% since 2000; it peaked in 2010 at 2.7%,” he said.

By Amanda Fung

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