Home prices rose 10.0 percent in 2012’s fourth quarter, the strongest yearly increase for prices since 2005.

By Peter Ricci

Median existing single-family home price rose 10.0 percent in the fourth quarter of 2012 year-over-year, the strongest yearly increase for home prices since the fourth quarter of 2005, according to the National Association of Realtors.

That’s up from an 8.8 percent yearly increase in the third quarter, and brings the median home price up to $178,900. Lawrence Yun, NAR’s chief economist, said a number of factors are at play in housing’s strong performance.

“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” he said. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”

Emilio Palomo, an agent with Riteway Properties in Miami Beach and MBF member, said that home prices in Brickell, Miami Beach and Coral Gables have been extremely strong, especially after the turn of the year.

“It’s been really nuts,” he said. “After the first two weeks of January, it’s been pretty great.”

Also, as our infographic below demonstrates, NAR found that more and more metropolitan markets have shown price increases as the real estate market has recovered. Highlight the graph with your cursor to see how many metro markets saw their home prices rise last year!