Home price growth slows
March 2, 2005
U.S. house prices increase 11% annually
OFHEO Director Armando Falcon Jr.
Average U.S. home prices increased 11.17 percentfrom the fourth quarter of 2003 through the fourth quarter of 2004, according to the Office of Federal Housing Enterprise Oversight.
Quarterly appreciation was 1.69 percent, or an annualized rate of 6.77 percent. This represents a sharp deceleration from the revised quarterly appreciation during the third quarter, an exceptionally large increase of 4.79 percent.
"This report reflects a slowing of the tremendous house price appreciation we've seen recently, but it is still growing at a strong pace," OFHEO Director Armando Falcon Jr., said.
"The rate of increases eased in all areas of the country," said Patrick Lawler, OFHEO chief economist. "Despite the deceleration, house prices continue to outpace the slower growth of prices of non-housing goods and services incorporated in the Consumer Price Index."
House prices grew 11.17 percent in the past four quarters, while other goods and services grew only 3.6 percent.
Nevada continued to top the states with the largest annual appreciation of 32.38 percent. Las Vegas-Paradise continued to top metropolitan areas with annual appreciation of 36.23 percent. In the latest quarter, house price appreciation slowed to 1.67 percent.
Other states with significant appreciation include: Hawaii at 24.56 percent, California at 23.44 percent, the District of Columbia at 22.97 percent, and Florida at 18.97 percent. The smallest annual increases occurred in Ohio at 3.91 percent, Texas at 3.85 percent and Indiana at 3.70 percent.
California led the states with the largest number of metro areas showing big price gains. Of the top 20 MSAs, California had 14. Florida had four MSAs in the top 20 with Palm Bay-Melbourne-Titusville showing the strongest growth with 26.25 annual percent appreciation.
Other significant findings in the Housing Price Index include:
- Although no state or MSA had negative appreciation over the past year, during the quarter, 31 of the 265 ranked metropolitan areas had negative appreciation from the previous quarter.
- The Census Division with the highest rate of growth continued to be Pacific (Washington, Oregon, and California) at 19.54 percent. West South Central was again the lowest at 4.86 percent. It is comprised of Oklahoma, Arkansas, Louisiana and Texas.
OFHEO's index is based on analysis of data obtained from Fannie Mae and Freddie Mac from more than 29.31 million transactions over the past 30 years. The HPI reflects price movements on a quarterly basis of sales or refinancings of single-family homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac.
Copyright 2005 Inman News