House prices in rural America grew more rapidly over the last ten years than they did in metropolitan areas, according to a new government survey.

Just the opposite was true during the 1980s, when inflation-adjusted house prices in rural areas actually declined by an average of 8 percent.

But according to a study by the Office of Federal Housing Enterprise Oversight, rural areas have grown more rapidly throughout most of the '90s. Indeed, while rural areas were experiencing "modest appreciation," the agency found, metro areas were seeing "significant declines." And as a result, the gap between housing prices in the country and those in the city has narrowed considerably.

This was particularly noticeable in the Pacific Region, reports OFHEO, the federal agency which oversees the financial safety and soundness of Fannie Mae and Freddie Mac, the two government chartered institutions charged with keeping money flowing to America's home buyers.

In the Pacific states Alaska, California, Hawaii, Oregon and Washington prices of homes in the country lost significant ground in the '80s. By 1990, metro house prices had risen 37 percent while rural prices had fallen 10 percent. But in the early and mid '90s, metro prices went bust while rural areas continued to post gains. And by 1997, rural prices had fallen only 7 percent relative to city prices.

OFHEO and others attribute this phenomena largely to technological advances that have made business less dependent on location. Thus, not only have families found rural communities more desirable, so have the companies they work for. But even businesses which stay behind in the central cities are allowing their employees the opportunity to telecommunicate from their rural residences.

They agency also suggests that metro prices might has reached "their natural equilibrium" as builders have moved out to rural locations where land is more plentiful and less expensive, and where there are fewer regulatory barriers to construction. Once prices reach a point where the previous rate of increase cannot be sustained, OFHEO points out, the cycle turns and prices no longer rise month after month or year after year.