Western home prices fell 6.3% in Jan.

"U.S. home prices fell 6.3 percent in January from a year earlier, the smallest decline in five months, as lower mortgage rates began to spur demand.

The decline was led by a 21 percent drop in the region that includes California, the biggest U.S. state, the Federal Housing Finance Agency in Washington said today. The monthly house price index is down 9.6 percent from its peak in April 2007.

The pace of home-price declines is slowing as cheaper financing lured buyers and helped offset foreclosure sales. A wave of refinancing is likely to boost home-loan originations by $800 billion to $2.78 trillion, the Mortgage Bankers Association said today. Refinancing will total $1.96 trillion in 2009 and purchase originations will increase to $821 billion, the group said, as the Federal Reserve buys mortgage-backed securities."

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Western home prices fell 6.3% in Jan.