NEW YORK, Dec 26 Reuters Annual home prices in October rose again, pointing toward continued recovery of the housing market, data on Tuesday showed.

A Federal Housing Finance Agency FHFA report showed home prices grew 6.3 on a yearly basis, up from a revised 6.2 the month prior.

Annual price growth began to accelerate in June after declining steadily since February 2022. Prices increased moderately by 0.3 on a monthtomonth basis after climbing by 0.7 the month before.

Rates on the most common home loan neared 8 in October, reaching a twodecade high on the back of the Federal Reserve39;s rate hike cycle.

The Fed left its policy benchmark interest rate unchanged for three consecutive meetings, bolstering expectations of a closing rate hike cycle and stoking a rally in the bond market.

The average rate on a 30year fixedrate mortgage fell below 7 in December, as yields on mortgagebacked securities headed down. Existing home sales have risen moderately since then, gaining 0.8 in November and indicating softening rates may draw sellers from the sidelines and open up inventory to prospective buyers, a National Association of Realtors report released in December showed.

The lack of inventory in the housing market has continued to affect the sector and has reduced the effects of higher mortgage rates, said Eugenio Aleman, chief economist at Raymond James. This decline in mortgage rates is likely to push future HPI readings higher as more buyers enter the market and the…