U.S. home prices rise nearly 13 percent

Business Week reports:

Average home prices rose 12.95 percent on an annualized basis from the October-December quarter of 2004 to the fourth quarter of 2005, the new report showed. That was up from a revised 12.55 percent increase from the third quarter of 2004 to the same quarter last year.

The fourth-quarter figure is derived from an average of prices in October, November and December. Prices in that October-December period were up 2.86 percent from the third quarter.

In the latest sign that the nation's housing boom is now easing after five record-breaking years, the Commerce Department reported Wednesday that construction activity in January slowed to the most sluggish gain in seven months.

The OFHEO report, based on data from Fannie Mae and Freddie Mac on repeat sales and refinancings of single-family homes, also found that:

--Home prices grew by record levels during the fourth-quarter yearly span in 26 metropolitan areas around the country.

--Growth in home prices in Arizona continues to accelerate, with a one-year rate of increase of 39.7 percent in the Phoenix-Mesa-Scottsdale area -- the largest of any metropolitan area.

--The Mountain states became the area with the fastest-growing home prices, edging out the Pacific region. The slowest growth in prices continues to occur in Illinois, Indiana, Michigan, Ohio and Wisconsin.

It appears warm weather climate is more in demand.