U.S. home prices gained 0.9% in the third quarter after an upwardly revised 2% gain in the previous quarter, and all but two of the seven regions tracked recorded sequential increases, Freddie Mac said Tuesday.

Frank Nothaft, Freddie's chief economist, said the gains during those six months reflect higher sales volume — up 15% between the first and third quarters — and erased nearly 40% of the price declines the previous two quarters.

Freddie's Conventional Mortgage Home Price Index, which excludes all refinancings, was down 3.9% year over year in the third quarter.

"The lowest average fixed-rate mortgage rates in a half century, lower house prices, incentives to encourage first-time buyers and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes," Nothaft said.

For the second consecutive quarter the nation was led by the Pacific region, which had a 3.9% gain from the previous quarter.

The New England region (0.7%) and the mountain region (0.6%) were the only ones to post declines.

The National Association of Realtors said last week that its forecasting gauge of housing-market activity climbed to its highest level in more than three years in October.

On Nov. 23 the association said October sales of existing homes jumped 10% over September as buyers continued to take advantage of a first-time-homebuyer tax credit, low prices and low mortgage rates.

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