Home prices rose 12.4% nationwide over the 12 months ended Sept. 30, up from 5.7% in the previous 12 months, according to Freddie Mac.In the third quarter, prices rose at an annualized rate of nearly 16%, Freddie Mac reported in releasing its quarterly Conventional Mortgage Home Price Index. The index showed that, for the sixth quarter in a row, the Pacific states recorded the largest gains in home prices, which rose 20.9% for the 12-month period. The Middle Atlantic states of New Jersey, New York, and Pennsylvania followed with a 16.5% growth rate, and the New England states finished third with a 16.2% rate. "The cumulative effect of two years in which 30-year fixed mortgage rates averaged just 5.8% and an improving employment picture this year ha[s] buoyed the housing market to new highs," said Frank Nothaft, Freddie Mac's chief economist. ".... We are expecting national home price growth to slow next year as a result of higher interest rates. However, there is no reason to expect a decline in house prices in any area as long as job growth continues." The index was jointly developed by Freddie Mac and Fannie Mae.

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