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Home price growth accelerated in December as the number of homes on the market continued to decline.

The S&P CoreLogic Case-Shiller National House Price Index, which measures average home prices in major metropolitan areas across the country, rose 10.4% in the year ending in December, against 9.5% the previous month. December marked the highest annual rate of price growth since January 2014.

Home buying demand has jumped in recent months, driven by historically low interest rates. Sales of previously owned homes, which make up the bulk of the housing market, increased in 2020 to their highest annual level since 2006, according to the National Association of Realtors.

The supply of homes for sale fell, prompting buyers to compete for homes and push up prices. There were 1.07 million homes for sale at the end of December, down 23% from December 2019, according to NAR.

The 10-city Case-Shiller Index rose 9.8% in the year ended December, compared to 8.9% in November. The 20 cities index rose 10.1%, following an annual gain of 9.2% in November.

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