US home prices higher in October

US home prices climbed in October at a slightly faster pace as the supply of properties on the market remained tight, according to a closely watched private report released Tuesday.

The S&P/Case-Shiller price index for 20 major cities rose 5.5 percent from a year ago in October following a 5.4 percent rise in September.

Month-over-month, the index rose 0.8 percent.

Twelve of the cities reported an acceleration in year-over-year gains. Leading the pack were San Francisco; Denver, Colorado; and Portland, Oregon, with all three posting 10.9 percent increases.

"Generally good economic conditions continue to support gains in home prices," said David Blitzer, head of the Index Committee at S&P Dow Jones Indices, in a statement.

"Among the positive factors are consumers' expectations of low inflation and further economic growth as well as recent increases in residential construction including single-family housing starts."

Blitzer noted that inventories of existing homes, the majority of the US housing market, have averaged near a five-month supply, a "fairly tight" supply.

Blitzer said that the Federal Reserve's decision two weeks ago to begin raising interest rates was not expected to push up historically low mortgage rates quickly.

He noted that the Fed's latest projections suggest that the fed funds rate will be around 2.6 percent in September 2017 compared to the current rate of about 0.5 percent.

"These data suggest that potential home buyers need not fear runaway mortgage interest rates," Blitzer said.

The average 30-year mortgage rate was 3.94 percent in November, compared with 4.0 percent a year ago.