Residential property prices in the USA rose in January as demand from buyers continued to outpace housing supply, the Federal Housing Finance Agency said in its latest report.
A low number of homes on the market restricted property sales, pushing prices up by 0.5% month-on-month, with the latest figures from the National Association of Realtors reveal that closings on purchases of existing homes fell by 7.1% to an annual rate of 5.08 million in February, down from 5.47 million in January.
Property prices increased from a year earlier in all regions on the back of the widening supply-demand imbalance, led by the South Atlantic - including Maryland, Virginia and the District of Columbia - with an 8.9% gain.
Prices rose by 7.4% in the Pacific area, with California, Oregon and Hawaii. The Middle Atlantic region - New York, New Jersey and Pennsylvania - had the smallest increase, at 1.7%.
As far as U.S. property prices are concerned, the latest figures from the Realtors group show that the average price of a home in the country stood at $215,000 (£150,560) in January, up 8.3% from a year earlier.
Looking further ahead, a recent poll by Reuters found that U.S. home prices are likely to increase by 5% this year, followed by similar gains in 2017.
The Federal Reserve System (Fed) increased interest rates for the first time in a decade in December but the housing market remained robust, with property resales hitting a six-month high in January.
U.S. property prices also rise by around 5% in 2015, according to the S&P/Case Shiller composite index of prices in 20 metropolitan areas.
“The housing recovery is quite sustainable in the U.S. and should continue at a moderate rate through this year and next,” said Sal Guatieri, a senior economist at BMO Capital Markets.
“We just don't see interest rates rising meaningfully to slow the markets that much. Mortgage rates are likely to remain low in even if the Fed raises interest rates slowly,” he added.
However, there are some housing market analysts that believe the fragile state of the U.S. economy could have an adverse impact on the U.S. property market causing home values to fall in the near future.
A separate poll by Reuters reveals that there is currently a 20% chance of a U.S. recession in the next 12 months.