Nevada leads U.S. in spiking home prices

WASHINGTON - U.S. home prices jumped by the most in 6½ years in December, with double-digit price growth in Nevada and the West leading the way.

Home prices nationwide rose 8.3 percent in December compared with a year earlier, according to a Tuesday report from CoreLogic, a real estate data provider. That is the biggest annual gain since May 2006.

Nevada ranked No. 2 in home price appreciation, at 15.3 percent. That was second only to Arizona's 20.2 percent. In California, an important feeder market for local tourists and relocating new residents, prices jumped 12.6 percent, the nation's fourth-best performance.

Other states in the top five were Idaho, where prices were up 14.6 percent, and Hawaii, where they increased 12.5 percent.

The report traced the price gains to a low supply of homes and rising demand.

Home prices nationwide also increased 0.4 percent from November to December. That's a healthy increase given that sales usually slow over the winter months.

Steady increases in prices are helping fuel the housing recovery. They're encouraging some people to sell homes and enticing would-be buyers to purchase homes before prices rise further.

Higher prices also can make homeowners feel wealthier. That can encourage more consumer spending.

Most economists expect prices to keep rising in 2013. Sales of previously occupied homes reached their highest level in five years in 2012 and will likely keep growing. Homebuilders, encouraged by rising interest from customers, broke ground on the most new homes and apartments in four years last year.

Ultra-low mortgage rates and steady job gains have fueled more demand for houses and apartments. More people are moving out into their own homes after doubling up with friends and relatives in the recession.

At the same time, the number of previously occupied homes for sale has fallen to the lowest level in 11 years.

"All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery," said Anand Nallathambi, CEO of CoreLogic.

Prices rose in 46 of 50 states in December. States where prices fell were Delaware, Illinois, New Jersey and Pennsylvania.

The housing recovery is also boosting job creation. Construction companies have added 98,000 jobs in the past four months, the best hiring spree since the bubble burst in 2006. Economists forecast even more could be added this year.

Housing has been a leading driver of past recoveries. But the bursting of the housing bubble pushed a flood of foreclosed homes on the market at low prices. That made it hard for builders to compete.

And a collapse in home prices left millions of homeowners owing more on their mortgages than their houses were worth. That made it difficult to sell.

Now, six years after the bubble burst, those barriers are fading. Some economists forecast that housing could add a point or more to economic growth this year.

Las Vegas Review-Journal writer Jennifer Robison contributed to this report.