U.S. Home Prices Post Biggest Gain Since 2005

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U.S. home prices showed the largest year-over-year gain in the second quarter in seven-and-a-half years, according to data released today by the National Association of Realtors.

The national median existing single-family home price was $203,500 in the second quarter, up 12.2 percent from $181,300 in the second quarter of 2012, NAR reports. That's the strongest year-over-year increase since the fourth quarter of 2005 when it surged 13.6 percent.

In the first quarter the median price rose 11.3 percent from a year earlier, NAR said.

NAR tracks monthly home sales data, but also releases quarterly reports. It has already reported that sales slowed in June, but prices continued to increase.

"There continue to be more buyers than sellers, and that is placing pressure on home prices, with multiple bids common in some areas of the country," said Lawrence Yun, NAR's chief economist.  "Higher interest rates are now causing sales to level out, but the tight supply conditions look to be with us for the balance of the year in most of the country.  Areas with tighter supplies generally are seeing the strongest price growth, including markets such as Sacramento, Atlanta, Las Vegas, Naples, San Francisco and Los Angeles."

Thirty-one percent of the areas tracked by NAR posted double-digit gains in the quarter. Today Las Vegas reported that median home prices in June are up more than 35 percent from a year ago.

CoreLogic recently predicted that U.S. home price increases are likely to slow by 2014, but post 4 percent annual increases through 2018.