WASHINGTON (AP) – U.S. home prices climbed at more than double the pace of incomes in January, a trend that could ultimately create affordability challenges for buyers.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.7 percent from a year earlier, a slight increase from the 5.6 percent annual increase in December. Home values have risen 2.6 times faster than average hourly wages, which have improved just 2.2 percent. Supplies of homes on the market have fueled much of the price growth, as low mortgage rates and steady hiring have sparked demand.
Denver, Portland, San Francisco and Seattle each registered double-digit annual price increases.
The index remains more than 11 percent below its mid-2006 peak, when subprime mortgages pushed the market to heights that triggered the Great Recession in late 2007.