LOS ANGELES (AP) — The median home price in Southern California rose nearly 2 percent last month from September, as the inventory of homes for sale continued to shrink and lenders worked to avoid fresh foreclosures, a tracking firm said Tuesday.

Last month's median home price of $280,000 in the six-county region of Southern California was about 7 percent less than the October 2008 median price of $300,000. That's the median's smallest year-over-year decline since September 2007, San Diego-based MDA DataQuick said.

The median sales price in Orange County rose nearly 4 percent from a year ago to $436,000, the county's second consecutive gain. San Diego County's year-over-year median increased 0.5 percent, its first such gain in more than three years.

The region's median sale price has risen or held steady on a month-to-month basis since it dropped to $247,000 in April, its lowest point in more than seven years.

DataQuick President John Walsh attributed the price stability to low mortgage rates, eagerness among eligible first-time buyers to take advantage of a federal tax credit, and government pressure on loan servicers to reduce foreclosures.

"The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market," Walsh said. "The real question now is how well can the market perform next year as some of the government stimulus disappears."

DataQuick said foreclosures accounted for about 41 percent of sales in October, down from a high of nearly 57 percent in February.

The firm also said home sales in October increased about 3 percent from a year ago to more than 22,000. The increase made for 16 consecutive months of year-on-year gains.