Home prices rose 6.2 percent in January

Why homebuyers should look south

WASHINGTON — U.S. home prices posted another big gain in January, pushed higher by a shortage of homes for sale.

Standard & Poor's says its S&P CoreLogic Case-Shiller national home price index climbed 6.2 percent in January from a year earlier. That nearly matches December's 6.3 percent gain, which had been the fastest 12-month growth in nearly three years.

The price of houses is easily outpacing wage growth and inflation.

Prices rose 12.9 percent in Seattle, 11.1 percent in Las Vegas and 10.2 percent in San Francisco. Chicago and Washington D.C. posted the weakest annual home-prices gains: 2.4 percent.

Homes for sale are scarce. It would take just 3.4 months to snap up the supply of available homes at the current sales rate, down from an average since 2000 of 6 months.

"Admittedly, tight market conditions and rising earnings growth could give house prices a boost this year. But, at the same time, mortgage interest rates are set to reach their highest level since 2009," analysts at Capital Economics wrote in a note.  "Accordingly, we expect annual house price growth to continue to ease, ending the year at around 5 percent."