House prices unexpectedly advanced in December, according to a report from the Federal Housing and Finance Administration on Tuesday. which noted a 0.1% month-over-month increase in U.S. house prices following a 2.2% decline in November.

The report showed a 0.1% month-over-month increase in U.S. house prices following a downwardly revised 2.2% decline in November. The consensus had been for a 1.7% contraction.

"Price declines continued in the fourth quarter although not as rapidly as some had expected," said FHFA Director James B. Lockhart. "We are hopeful the housing initiatives announced last week by President Obama will begin to provide much-needed stability to the housing markets."

The largest contraction came in the South Atlantic region, where home prices were down 1.1%, and the Middle Atlantic region, where prices were down 0.8%.

The largest gainers were house prices in the West North Central Region, which were up 2.7%, and a 1.3% gain in the West South Central region.

Meanwhile, quarterly house prices fell 3.4% in Q4 after a downwardly revised 2.0% fall previously - the largest quarterly decline in the history of the index. The consensus had been for a 2.0% decline.

By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009