Home prices increased at an 8.4% rate nationwide in 2003, up from 7.6% the year before, according to Freddie Mac.In the fourth quarter, the annualized home price appreciation rate was 17.8%, Freddie Mac said in releasing the Conventional Mortgage Home Price Index. The index showed that the Pacific states recorded the largest gains in home prices, which rose 13.1% for the year. The Middle Atlantic states of New Jersey, New York, and Pennsylvania followed with an 11.9% growth rate, and the New England states finished third with an 11.2% rate. "The 45-year low in interest rates set this past June spurred a huge refinance and home purchase wave that crested in the fourth quarter," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Higher interest rates in the third and fourth quarters did little to quell interest in the housing market due to the very high economic growth in the second half of the year and the tax break that many households received." The index was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac can be found online at http://www.freddiemac.com.
