(Bloomberg) -- Home-price growth in the US accelerated in December, capping a period with a steep drop in mortgage rates.

Prices nationally rose 5.5% from a year earlier, according to data from S&P CoreLogic Case-Shiller. That’s larger than the 5% annual gain in November. 

December’s index tracks the final three months of 2023, a time in which 30-year borrowing costs soared to a two-decade high of 7.79% then fell sharply to end the year at 6.61%. The decline unleashed some pent-up demand among buyers who had to compete for a tight supply of homes listed for sale. The country’s persistent inventory shortage has helped push purchase prices ever higher. 

A measure of values in 20 cities was up 6.1% from a year earlier in December, compared with a 5.4% increase in the previous month. San Diego had the biggest year-over-year gain, at 8.8%, followed by Los Angeles and Detroit, each with an 8.3% increase.

On a seasonally adjusted basis, 10 of 20 markets beat prior records. Portland, Oregon, had an increase after 11 months of declines.

“The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the US housing sector,” Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. “Looking back at the year, 2023 appears to have exceeded average annual home-price gains over the past 35 years.”

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