Home Prices Mark Biggest Gains Since 2006

The latest numbers on home prices show strong gains across the country. The housing market recovery kicked into high gear during the first half of 2013 due in part to interest rates that were at a record low.

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And before the ball dropped in Times Square last night, new numbers came out on the housing market, and they showed the past year saw the biggest gains in home prices since 2006.

NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: The housing market recovery kicked into high gear last year. And that's in large part because at the start of the year, back last winter, it was just a great time to buy a house. Interest rates were at record lows. Home prices hadn't risen that much yet in many areas. Lots of respected economists were saying now is the time to buy. And, we saw a strong revival in demand from home-buyers.

DAVID BLITZER: The results are housing prices continue to go up 13.6 percent over the last 12 months.

ARNOLD: David Blitzer is an economist with S&P - which publishes the closely watched Case-Shiller Home Price Index. He thinks though such big price gains are not going to be sustainable in the coming year. He points out interest rates rose in the second half of the year, which makes monthly mortgage payments more expensive for homebuyers. That's cooled things of a bit. Home sales have slowed and prices aren't rising less quickly.

BLITZER: By this time next year, I think we'll be looking at home prices that are still going up but more likely single digits - six, you know, five, six, seven percent annual increase, not 13 and a half.

ARNOLD: Still, if the labor market keeps improving and more Americans get back to work, Blitzer thinks that should help sustain a healthy housing market.

Chris Arnold, NPR News.

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