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U.S. home prices accelerate in February as sales rise

Associated Press

WASHINGTON – U.S. home prices climbed at a faster pace in February than the previous month, driven by higher sales and a limited supply of available houses.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 5 percent in February from 12 months earlier, S&P said Tuesday. That is up from a 4.5 percent pace in January.

Faster sales likely drove the price gain. Signed contracts to buy homes jumped in February, yet the number of Americans listing their homes for sale remains low. That has led to bidding wars in some cities.

Home prices are increasing at a more sustainable pace than in the past two years, when they rose at a double-digit pace for 14 straight months. Yet some economists warn that the ongoing increases may price many would-be buyers out of the market, particularly as pay gains remain weak.

“While slow and steady growth throughout the country may sound like an unambiguously good thing, some of these markets were unaffordable to begin with and are not getting any cheaper,” said Patrick Newport, an economist at IHS Global Insight.

All 20 cities in the index reported year-over-year price gains in February. Home prices in Denver jumped 10 percent, the most of any city, followed by San Francisco with 9.8 percent. Denver is one of two cities, along with Dallas, where prices have surpassed their previous peak during the housing boom.

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