SAN JOSE (CBS SF) – Despite continued demand for housing in the South Bay, home prices in the region slipped in the second half of last year, according to economic research and consulting firm Beacon Economics.

The median home price dipped to $1.14 million in the fourth quarter from $1.19 million in the third quarter due in part to seasonal factors and rising interest rates that peaked in November.

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In September the Federal Reserve raised interest rates, pushing up mortgage rates and also stoking fears of a recession. Those fears have eased somewhat since the Fed has decided to hold off on further increases.

Over the entire year, home prices in the South Bay jumped a half a percent, much slower than prices in either the East Bay or the San Francisco region, which includes San Mateo County, the researchers said.

Home prices in the East Bay and San Francisco grew by 4.5 and 5.6 percent.

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Rents in the South Bay last year jumped 4.9 percent to $2,682 per month. South Bay renters need to earn at least $107,280 per year to avoid being burdened by rent, according to Beacon Economics.

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According to the firm, the South Bay consists of Santa Clara and San Benito counties and includes the city of San Jose, which is the Bay Area’s largest city.

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