Home prices in the United States are rising at the fastest rate in 15 years

Home price growth accelerated to a 15-year high in January as the supply of homes for sale fell to a new low.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the country, rose 11.2% in the year ending in January, against 10.4% the previous month. January marked the highest annual rate of price growth since February 2006.

Home buying demand remains robust due to historically low interest rates and a desire for more space. According to the National Association of Realtors, sales of previously owned homes, which make up the bulk of the housing market, increased in 2020 to their highest annual level since 2006.

The supply of homes for sale fell, prompting buyers to compete for homes and push up prices. There were 1.03 million homes for sale at the end of January, the lowest level in data dating back to 1982, according to NAR.

The 10-city Case-Shiller Index rose 10.9% in the year ended January, compared to a 9.9% increase in December. The 20 cities index rose 11.1%, after an annual gain of 10.2% in December. Price growth accelerated in all 20 cities.