After a 12-year rise, house prices declined 1.2 percent in November, the National Association of Realtors reported. The report was at odds with the government's consumer price index, released before Christmas, which showed house prices rising 1.8 percent in November. Another report, on which there was no dispute, showed mortgage interest rates rising to an average of 12.93 percent in December.
Jack Carlson, the realty group's chief economist, attributed the decline to tight money, declining sales as homes become less affordable, and the purchase of proportionately smaller homes. He said that the next few months may see further "modest declines" and that prices should begin rising again by summer.