US home price gains accelerate to 31-month high in January

Home price gains in the US accelerated slightly at the beginning of the year, reaching their fastest pace in over two years.

The S&P CoreLogic Case-Shiller national home price index rose at a 5.7% year-on-year pace in January, a 31-month high, and up two-tenths from the pace observed in the month before.

A gauge for home prices in the 20 largest cities meanwhile advanced at a 5.7% clip, up from 5.5% in the prior month, and by 0.9% on the month, the same as in December.

The consensus estimate was for an increase of 0.8% month-on-month.

Commenting on Tuesday's data, David M.Blitzer, Managing Director of the Index Committee at S&P Dow Jones Indices, said the Federal Reserve's recent 25 basis point interest rate hike would add less than a quarter percentage point to mortgage rates in the near future.

However, three or four more interest rate hikes this year would be a different matter, Blitzer said.

Tight supplies and resulting higher prices were hurting affordability, he added, and at some point would force prices to level-off and fall.

"However, we don’t appear to be there yet.”