Home prices rose in more than 40 percent of U.S. cities in the fourth quarter of last year, as massive federal spending helped the housing market show signs of stability.
The National Association of Realtors said Thursday that the median sales price for previously occupied homes rose in 67 out of 151 metropolitan areas in the October-December quarter versus a year ago. That's a sharp improvement from the third quarter, when prices rose in only 20 percent of cities.
The national median price was $172,900, or 4.1 percent below the fourth quarter last year. That was the smallest year-over-year price decline in more than two years.
Home sales surged in the quarter, outpacing the third quarter and the previous year's figures. A federal tax credit of up to $8,000 for first-time homebuyers that was originally due to expire Nov. 30 but was extended through April provided much of the fuel. Sales for the quarter hit a seasonally adjusted annual rate of 6 million, up 27 percent from a year earlier.
The big question hanging over the housing market this year is whether the tentative recovery will stumble after the government pulls back support. The Federal Reserve's $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March. A month later, the newly extended tax credit for first-time homebuyers runs out.
Economists are also concerned about a huge backlog of homeowners facing foreclosure. If those homes go up for sale at deeply discounted prices, median prices could turn downward again. Indeed, prices in some severely depressed areas are still falling.
The largest price decline by percentage in the fourth quarter was in Ocala, Fla., where the median sale price plunged 23.4 percent to $93,000. Foreclosure-plagued Las Vegas saw its median price tumble 23.3 percent to $139,400 versus a year ago.
The largest price gain was in Saginaw, Mich., where prices rose more than 50 percent to a median of $67,400. Cleveland followed with an increase of 25 percent to $110,000.
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