WASHINGTON — U.S. home prices rose in December as 2012 saw the best calendar-year growth in seven years, according to a closely followed index released Tuesday.
The S&P/Case-Shiller 20-city composite index posted a 0.2 percent increase in December, following a 0.1 percent decline in November. After seasonal adjustment, home prices rose 0.9 percent in December.
“Home prices ended 2012 with solid gains,” said David Blitzer, index committee chairman at S&P Dow Jones Indices.
Looking at longer-term trends, December’s prices were up 6.8 percent from the same period in the prior year, with increases in 19 of 20 cities. That’s the best calendar year gain since a 15.5 percent jump in 2005.
New York was the only city with a year-over-year decrease, falling 0.5 percent.
“The improvement over varying parts of the country suggests that portions of the country which were previously lagging on the home price recovery front have joined in the improvement,” wrote Gennadiy Goldberg, a strategist at TD Securities. “Recovering home values will likely continue to help holders of underwater mortgages, with more homeowners becoming eligible for refinancing at lower mortgage rates. This in turn, will allow more money to be freed up for spending by consumers – a positive for the economy going forward.”
The Triangle is not among the 20 markets included in the Case-Shiller index. Home prices have been slower to rise in this region. Excluding distressed sales, home prices last year increased 3 percent in the Raleigh-Cary market and 0.8 percent in Durham-Chapel Hill, according to CoreLogic, a real estate data provider. That compared to 8.3 percent nationally.
Despite gains, prices remain about 29 percent below a bubble peak in 2006, according to Case-Shiller data.
Low inventories and increasing demand have supported prices over the past year. While the housing market remains far below peak levels, home construction, sales and confidence among builders have all been trending higher, according to recent data reports.
Still, looking forward, price growth may slow down, Blitzer said.
“Housing is on the upswing; some of the strongest numbers may have already been seen,” Blitzer said.
He cited other recent housing data that show moderating growth. For example, a recent report on confidence among home builders showed large gains from the prior year, but a monthly decline due to lighter prospective-buyer traffic and lower sales of single-family homes.
Elsewhere Tuesday, the Federal Housing Finance Agency reported that its own gauge of home prices showed growth of a seasonally adjusted 0.6 percent in December, and an annual gain of 5.5 percent.
Staff writer David Bracken contributed.