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A closely watched measure of US home prices rose in February at the quickest pace since 2014, the latest indication of tight supplies and strong demand in the real estate market.

The S&P/Case-Shiller index of home prices in 20 major US cities climbed 5.9 per cent year-over-year, from 5.7 per cent in January, on a non-seasonally adjusted basis. The reading came in above Wall Street expectations for a rise of 5.8 per cent.

Prices were up 0.7 per cent month-over-month on a seasonally adjusted basis, matching forecasts.

The data highlight the tight supply of homes available on the market at a time when demand has been lifted by still-low mortgage rates and bouyant asset prices.

“There are still relatively few existing homes listed for sale and the small 3.8 monthsupply is supporting the recent price increases,” said David Blitzer, chair of the index committee at S&P Dow Jones Indicies.

Echoing that sentiment, First American chief economist Mark Fleming noted that, “the lack of homes listed for sale is causing unadjusted house price growth to remain strong”.

A more forward-looking reading on sales of newly-build homes for the month of March is due later in the morning.

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