02/03/2015 08:09 EST | Updated 04/05/2015 05:59 EDT

US home prices increases slowed in December on weak demand; prices fall in 3 states

WASHINGTON - U.S. home values rose at a modest pace in December, a sign there are too few potential buyers to bid up prices.

Real estate data provider CoreLogic says home prices rose 5 per cent in December from 12 months earlier. That is down from the 5.5 per cent price gain recorded in November. It's much lower than the double-digit gains that occurred last year.

Yet those much larger increases in early 2014 priced many potential buyers out of the market. Sales actually slipped last year, after several years of gains. Smaller price increases, along with lower mortgage rates, may spur a rebound in sales.

The biggest yearly gains were in Colorado, Texas, New York, Nevada and Michigan. Just three states saw prices fall compared with 12 months earlier: Maryland, Vermont and Connecticut.

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