Before a seasonal adjustment, the National Index posted a month-over-month gain of 0.2 percent in December while both the 10-City Composite and the 20-City Composite indices posted 0.3 percent increases.
The 20-city annual increase rose to 5.6% from a revised 5.2% previously while the 10-city index recorded an annual increase of 4.9% from 4.4% in November.
And while the index for the bottom and middle thirds of the market ticked up 0.5 percent in December, for year-over-year gains of 10.0 percent and 6.2 percent respectively, the index for the top third of the market slipped 0.3 percent for the second month in a row and its 3.9 percent year-over-year gain is the second smallest since mid-2012. Twelve cities reported greater price increases in the year ending December 2016 versus the year ending November 2016. "Home prices are rising, but the speed is not alarming, " he said.
Home prices continued their rise in December, according to the S&P CoreLogic Case-Shiller Indices, a measure of US home prices. This is up from November's increase of 5.6% and sets a 30-month high.
A number of markets that have seen prices grow modestly since the recession are starting to see much faster rates of increase than they had in the recent past. While the Fed has begun to ratchet up rates, mortgage rates are still at historical lows, with a 30-year fixed rate mortgage hovering around 4.2%.
Yet, rising rates could put a damper on that growth. It was followed by Portland at 10 percent and Denver at 8.9 percent.
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The FHFA added that the effective interest rate on all mortgage loans was 4.30 percent in January, up 31 basis points from 3.99 in December, while the average loan amount for all loans was $305,400 in January, down $13,700 from $319,100 in December.
"Looking at real or inflation-adjusted home prices based on the S&P CoreLogic Case-Shiller National Index and the Consumer Price Index, the annual increase in home prices is now 3.8%", he said. "Another factor supporting rising home prices is mortgage rates".
On a non-seasonally adjusted basis, the index rose by 0.3 percent in December after edging up by 0.2 percent in the previous month.
If mortgage rates continue to rise, economists said, the current rapid rate of home-price growth likely will slow.
December's numbers reflect the peak of a sharp rise in mortgage rates following the US election.