Home Prices Rise at Fastest Rate Since 1979

U.S. home prices increased at the fastest pace in 25 years during the second quarter, as the economy improved and low mortgage rates made financing cheaper.

Prices climbed an average of 9.4% from a year earlier, faster than the first quarter’s rise of 8.3%, according to a report from the Washington-based Office of Federal Housing Enterprise Oversight.

It was the fastest pace since 12% in the fourth quarter of 1979.

California, at 18.4%, was one of 19 regions with above- average annual price growth. The study excludes properties with mortgages higher than $333,700, the maximum amount allowed in 2004 for loans bought by the government-chartered Fannie Mae and Freddie Mac.