WASHINGTON (Reuters) - U.S. single-family house prices increased solidly in December, despite improving supply, which together with elevated mortgage rates will continue to erode affordability.

House prices rose 0.4% on a month-on-month basis after an upwardly revised 0.4% increase in November, the Federal Housing Finance Agency said on Tuesday. Prices were initially reported to have climbed 0.3% in November.

They increased 4.7% in the 12 months through December, following an upwardly revised 4.5% gain in November, which was previously reported as a 4.2% rise. The strong increase in prices was despite rising housing supply, which is being driven by ebbing demand amid higher mortgage rates.

House prices increased 4.5% from the fourth quarter of 2023 through the fourth quarter of 2024. The average rate on the popular 30-year fixed mortgage hovered just under 7% in December, data from mortgage finance agency Freddie Mac showed.

New housing supply is at a 17-year high. While the stock of previously owned homes on the market remains below pre-pandemic levels, inventory has increased significantly.

Data last week showed a plunge in existing home sales in January. The rise in monthly house prices was led by the Middle Atlantic region, which recorded a 0.8% surge. But prices dipped 0.1% in the West North Central and West South Central regions.

All census regions reported annual house price gains in December, with New England and the Middle Atlantic regions leading the pack. There were moderate price increases in the West South Central and Pacific regions.