Home prices were on an upward swing in 155 of 384 metro areas at the end of 2009, Fiserv, Inc. (NASDAQ: FISV) said Monday.

Despite the upward trend in those markets, average U.S. home prices fell 2.5% year-over-year in the fourth quarter, a Fiserv analysis of home price trends based on Case-Shiller and Federal Housing Finance Agency data showed.

"Optimism that a sustainable economic recovery is underway is driving increases in home prices across many U.S. metro areas," said David Stiff, chief economist at Fiserv. "More and more, consumers have confidence that buying a home doesn't mean catching a falling knife."

"Very large price declines have also made housing much more affordable, drawing in both first-time homebuyers and investors," Stiff added.

Among the findings of the analysts:

* California markets collapsed about one year before much of the rest of the U.S. Relative to bubble-era prices, these markets have seen the greatest improvement in housing affordability. Year-over-year (2009: Q4/2008: Q4), prices are up in 8 of 28 California metro areas and prices have increased from recent lows in 24 of 28 metro areas. The strongest rebounds were in coastal markets, including the Bay Area, Los Angeles, Orange County and San Diego, where there are decreasing levels of foreclosed homes. Markets in the interior have also experienced a price bounce, mainly due to strong investor demand.

* In Washington, D.C., home prices were up 5.2% year-over-year. Since the market bottom in early 2009, prices in this metro area have risen more than 9%. Washington has a relatively strong local economy with 6.8% unemployment compared to 9.9% for the U.S. The earlier rapid decline in prices also substantially improved affordability.

* Ohio and Michigan, two states hit hard by the recession and loss of manufacturing jobs, are seeing signs of stabilization. Housing is very affordable across metro areas in these states, according to Fiserv. There is less uncertainty about the future of the U.S. auto industry and jobs in auto and auto parts manufacturing have been increasing since December 2009.

* Other markets where investor purchases of foreclosed homes have dominated housing sales are also coming back into balance. This includes metro areas such as Minneapolis, Detroit and Memphis, Tenn., where recent sales have included more regular, non-distressed homes.

Stiff, however, warned there will be renewed downward pressure on home prices. "The first-time homebuyer tax credit has expired, the Federal Reserve has stopped buying residential mortgage backed securities (MBS) and the projected number of foreclosures remains extremely high. As a result, markets with recent price increases may see small price declines before prices finally stabilize at the end of this year or early 2011." The Fiserv Case-Shiller Indexes forecast that average single-family home prices will fall another 3.1% during over the next 12 months. Steep home price declines are expected to continue in markets that have been hurt most by the housing crisis. From the fourth quarter of 2009 through the fourth quarter of 2010, average home prices in Nevada, Arizona and Florida are projected to decline 9.2%, 9.5% and 7.7%, respectively.

The Fiserv Case-Shiller Indexes, which include data covering thousands of zip codes, counties, metro areas and state markets, are generated by Fiserv and include markets below the top 20 markets covered by the S&P/Case-Shiller Indices.

Representative home price data for selected markets:

Metro Population % Change (2006:Q4-2009:Q4) (2008:Q4 to2009:Q4) (Forecast 2010)

US 307,006,550 -27.0% -2.5% -3.1%

Austin 1,705,080 10.2% -1.7% -1.5%

Baltimore 2,690,890 -15.2% -3.0% -1.8%

Columbus 1,801,850 -8.2% -1.6% -2.3%

Fort Worth 2,121,230 3.8% -1.1% -1.5%

Indianapolis 1,743,660 -0.6% -0.6 -0.6%

Jacksonville 1,328,140 -30.5% -9.3% -5.2%

Kansas City 1,067,590 -4.7% -2.5% -0.9%

Louisville 1,258,580 1.2% -1.1% -0.5%

Milwaukee 1,559,670 -8.3% -2.8% -2.0%

Nashville 1,582,260 -4.0% -0.7% -2.4%

New Orleans 1,189,980 -4.6% -3.6% -1.8%

Orlando 2,082,420 -47.6% -16.8% -8.5%

Philadelphia 4,012,570 -5.3% -1.5% -1.6%

Raleigh 1,125,830 4.0% -3.6% -0.8%

Sacramento 2,127,360 -44.5% -3.3% -6.2%

Salt Lake 1,130,290 -6.5% -9.5% -2.4%

San Antonio 2,072,130 6.1% -0.7% -0.5%

San Jose 1,839,700 -30.4% 4.1% -8.2%

St. Louis 2,852,910 -6.5% 1.3% -1.1%

Tucson 1,020,200 -30.4% -7.7% -4.0%

Learn more about markets featured in this article: Los Angeles, CA.