Report: California leads country in April home prices growth

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Home prices in California shot upward in April, leading the nation in growth as the Southern California and Bay Area markets remained red hot, according to a new report.

Prices in the state rose 2.6% from March and nearly 18% from April last year, according to Lender Processing Services Inc. The company’s home price index showed prices rose 1.5% nationwide from March.

Tight housing inventory, low mortgage rates and an improving economy have helped the housing market recover and caused swift price increases across the country.

San Francisco led all metro areas with the largest growth as prices increased 3.6% from March,  LPS, a mortgage and consumer loan processing firm, said.

Both Sacramento and San Jose saw prices jump 3%.

Of the top 10 metro areas to see the biggest gains, all but one were from California. Los Angeles, which saw prices jump 2.2%, wasn't even among those markets.

The price gains have been eye-popping, but values still remain below the boom years, when easy money helped propel the market to dramatic heights before it crashed.

Experts say today's large gains should ease as more homes come on the market. New construction has increased and more owners have moved from negative to positive equity, freeing them up to place their home on the market.