Fastest rise since 2006 in US property prices

There were fresh signs of improving trends in the American housing market yesterday, with residential real estate prices over the 12 months to January growing at their fastest pace since summer 2006.

Boosted by the extraordinary measures put in place by the US Federal Reserve, which is buying tens of billions of dollars worth of mortgage-related bonds every month, prices across 20 major US cities tracked by the S&P/Case-Schiller index rose by 8.1 per cent in the year to January compared to the same period last year. That was the highest growth rate since June 2006, and comes after prices rose by 6.8 per cent in the 12 months to December.

In New York prices were up 0.6 per cent over the period. Phoenix, Arizona, was the leader by a mile, however, with prices there surging by an eye-watering 23 per cent.

"This marks the highest increase since the housing bubble burst," David Blitzer, who heads the index committee at S&P Dow Jones Indices, said of the gains.

He added: "Economic data continues to support the housing recovery."