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Washington – U.S. home prices increased modestly in September from a year ago, as roughly seven years of rising home values have hurt affordability.

The S&P CoreLogic Case-Shiller 20-city home price index rose 2.1% in September from a year ago, up from a 2% annual gain in August. Prices have so steadily outpaced wage growth that the market is now constrained as home values have tumbled 0.7% in San Francisco and increased just 0.8% in New York and 1.7% in Seattle.

Still, there are signs that low mortgage rates have boosted demand and prices could increase at faster pace in the months ahead as there is a shortage of listings.

Of the major metro areas, Phoenix led with annual price gains of 6%, followed by Charlotte at 4.6% and Tampa at 4.5%.

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