Home Prices Rise at 12.3% Rate in 3Q

Home prices increased at an annualized rate of 12.3% nationwide in the third quarter, down from a revised rate of 15.3% in the second quarter, according to the Conventional Mortgage Home Price Index released by Freddie Mac.The South Atlantic and Mountain states recorded the biggest price increases, with a 19.5% annualized growth rate, Freddie Mac said. The Pacific states experienced the third-highest annualized gains in the third quarter, with a 15.2% growth rate. "The gradual rise in mortgage rates during the third quarter moderated home price gains, compared with the second quarter," said Frank Nothaft, Freddie Mac's chief economist. ".... Home sales and single-family housing starts are still expected to set a new record this year. The devastating effects of hurricanes Katrina, Rita, and Wilma will likely keep overall construction material costs high and add to new construction in the affected region." The index was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac's website address is http://www.freddiemac.com.