In this Saturday, Jan. 5, 2013, photo a home is for sale in Glenview, Ill. U.S. sales of previously occupied homes rose in January to the second-highest level in three years, a sign that the housing market is sustaining its recovery and helping bolster the economy. The National Association of Realtors said Thursday that (AP Photo/Nam Y. Huh)
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In this Saturday, Jan. 5, 2013, photo a home is for sale in Glenview, Ill. U.S. sales of previously occupied homes rose in January to the second-highest level in three years, a sign that the housing market is sustaining its recovery and helping bolster the economy. The National Association of Realtors said Thursday that (AP Photo/Nam Y. Huh)
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In this Thursday, Dec. 20, 2012, photo, a home is for sale in North Andover, Mass. U.S. home prices rose at a healthy pace in December compared with a year ago, driven higher by rising sales and a smaller supply of available homes. (AP Photo/Elise Amendola)
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In this Wednesday, Nov. 14, 2012, photo, a woman walks towards a home for sale during a viewing for brokers in Leucadia, Calif. Americans bought new homes in November 2012 at the fastest pace in more than two and a half years, further evidence of a sustained housing recovery.(AP Photo/Gregory Bull, File)
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In this photo taken Tuesday, July 17, 2012, a single family home is for sale in the Hollywood area of Los Angeles. Americans bought more homes in July than in June and prices rose, the latest evidence that the housing market is slowly recovering. Sales of previously occupied homes rose to 4.47 million in July, a 2.3 percent increase from the previous month, the National Association of Realtors said Wednesday. (AP Photo/Damian Dovarganes)
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In this Tuesday, July 17, 2012 photo, a Quick Response Code is used on Realtor ad offering "dream homes" in the Hollywood Hills area of Los Angeles. Americans bought more homes in July than in June and prices rose, the latest evidence that the housing market is slowly recovering. Sales of previously occupied homes rose to 4.47 million in July, a 2.3 percent increase from the previous month, the National Association of Realtors said Wednesday. (AP Photo/Damian Dovarganes)
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FILE - In this Friday, Jan. 11, 2013 photo, a construction worker works at a new home under construction in Chicago. U.S. new-home sales jumped in January from the previous month to the highest level since July 2008, a sign that the housing recovery is accelerating. (AP Photo/Nam Y. Huh, File)
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In this Thursday, Jan. 3, 2013, photo, a home is for sale in Mount Lebanon, Pa. U. S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season. Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday , March 5, 2013, by CoreLogic. (AP Photo/Gene J. Puskar)
US home prices rose by most in nearly 7 years
WASHINGTON (
AP) — U.S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.
Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday by CoreLogic. That's up from an 8.3 percent increase in December and the biggest annual gain since April 2006.
Prices rose in all states except Delaware and Illinois. And prices increased in 92 of the 100 largest metro areas, up from 87 in December.
Home prices also rose 0.7 percent in January from December. That's a solid increase given that sales usually slow over the winter months.
Rising demand combined with fewer available homes is pushing up prices. Sales of previously owned homes ticked up in January after rising to their highest level in five years in 2012, according to the National Association of Realtors. At the same time, inventories of homes for sale fell to a 13-year low.
The states with the biggest price gains were Arizona, where prices rose 20.1 percent, followed by Nevada, with 17.4 percent, and Idaho, with 14.9 percent. California and Hawaii rose 14.1 percent and 14 percent, respectively.
The cities with the biggest gains were Phoenix, Los Angeles, Riverside, Calif., New York, and Atlanta.
Nationwide, home values were still down more than 26 percent from their peak in April 2006 through January, CoreLogic said. But in some states prices have recovered a lot of lost ground. In 15 states, home prices are within 10 percent of their peak values, CoreLogic said.
There have been other recent signs that the housing market is going strong. A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 ½ years. That suggests sales of previously occupied homes will keep rising in the coming months.
Steady increases in prices help fuel the housing recovery. They encourage some homeowners to sell homes and entice some would-be buyers to purchase homes before prices rise further.
Higher prices can also make homeowners feel wealthier. That can encourage more consumer spending, which drives 70 percent of the U.S. economy.
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