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​Home prices hit all-time highs in 4 cities in November

WASHINGTON - U.S. home prices increased at a faster clip in November, the gains fueled by solid hiring growth, historically low mortgage rates and a shortage of houses on the market.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.8 percent from a year ago, up from a 5.5 percent pace in October, according to a Tuesday report.

Home values nationwide have nearly recovered from their July 2006 peak, as the real estate market has slowly recovered from the housing bust that triggered the Great Recession. But several metro areas have fully rebounded from the downturn. Four metro areas -- Dallas, Denver, San Francisco and Portland Oregon -- have either matched or eclipsed their all-time highs. And Charlotte, North Carolina is less than 1 percent below its previous high.

Buyers crowded back into the housing market last year. Sales of existing homes rose 6.5 percent over the past year to 5.26 million, according to the National Association of Realtors. More Americans have been able to purchase homes as employers have added 2.7 million jobs and borrowing costs remain low. But the number of available listings has fallen 3.8 percent from a year ago, causing tight inventories that have fueled escalating prices.

The rising home values and limited selection could ultimately deter sales growth in 2016.

"The dearth of inventory has really taken its toll on the market," said Nela Richardson, chief economist at the brokerage Redfin. "Homebuyers this year are motivated but not desperate, and they refuse to overpay. Without more listings what we'll see are higher prices and lower sales volumes, a lousy way to start a new year for homebuyers."

The rising prices have created some affordability pressures -- such that down payments have fallen as a share of the purchase price even as they have increased in absolute terms.

For a conventional 30-year mortgage, the average down payment was 17.46 percent of the purchase price in the October-December quarter. That is down from 17.63 percent in the prior quarter, according to a Monday report by LendingTree, the online loan marketplace.

But buyers had to devote $51,721 for their average down payment at the end of 2015, a 5.72 percent increase from the third quarter.

The challenges caused by rising home values have been offset by falling mortgage rates in recent weeks.

Mortgage buyer Freddie Mac says the average rate on a 30-year fixed-rate mortgage declined to 3.81 percent last week from 3.92 percent a week earlier. Rates have historically averaged 6 percent, meaning that interest expenses are relatively low for homebuyers.

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