Home prices eked out a 4.5% gain on an annual, but fell on a monthly basis a 4.6%.

The troubling news is that home prices are far outpacing wage growth, according to the S&P Case Shiller home price index.

 “Home prices continued their march forward in January, showing modest growth from the previous year,” Quicken Loans vice president Bill Banfield said. “Prices may remain in this steady state for some time until we see moves in housing inventory.”

Narrower measures of home prices accelerated slightly in January but price growth in general has been slowing since the end of 2013.

“The slower pace of home value appreciation we’ve been seeing for the past few months is further proof of a market in transition, getting healthier as it returns to growth driven by fundamentals like more jobs, higher incomes and improving household formation,” said Zillow (Z) Chief Economist Stan Humphries. “This slower appreciation allows buyers and sellers alike to catch their breath, at the same time as confidence among renters grows. Roughly 5 million current renters have expressed a desire to buy this year, up from 4 million last year. As more renters transition into homeownership, rental demand will ease, helping to cool rapid rental appreciation while also helping create more rental vacancies that can be soaked up as more young households form.”

The home price index covering 10 major U.S. cities increased 4.4% in the year ended in January up from a 4.3% rise in December. The 20-city price index was up 4.6%.

“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices” says David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices. “Regional patterns in recent months continue: strength in the west and southwest paced by Denver and Dallas with results ahead of the national index in the California cities, the Pacific Northwest and Las Vegas. The northeast and Midwest are mostly weaker than the national index."

Blitzer said he is more troubled by how wages have stagnated. This could mean a big setback for housing when interest rates are raised.

“Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession,” Blitzer said.

All regions show gains in January led once again by cities on the West Coast but also including strong gains in Chicago, Boston, Minneapolis, and Charlotte. Year-on-year, price strength is led by Denver at plus 8.4% followed by Miami at 8.3% and Dallas at 8%. At the bottom are Cleveland and Washington D.C., though both are still in plus column, at a year-on-year 1.5 and 1.3% respectively.