Home Price Gains Continued to Moderate in 2006 Fourth Quarter
Continuing a trend started earlier in the year, the rate of home price appreciation continued to decelerate during the fourth quarter of 2006, according to the House Price Index released by the Office of Federal Housing Enterprise Oversight (OFHEO) on March 1.
Prices for the quarter were on average 5.9% higher than they were during the same quarter of 2005. Fourth-quarter home prices last year, which include refinancings, were up a seasonally adjusted 1.1% from the third quarter. The 2005 third-quarter price increase was revised upward to 1%.
Price appreciation in 2006 was substantially smaller than the tremendous price gains of recent years, which ranged from 7.4% in 2002 to 13.2% in 2005.
“These data show that, on the whole, prices are still rising, albeit at a much slower pace,” said OFHEO Director James B. Lockhart.
“The continuing strength in the economy and decreasing interest rates for borrowers prevented a harder landing in housing markets during the second half of last year,” added Patrick Lawler, OFHEO’s chief economist.
OFHEO’s purchase-only index, which excludes refinancings, indicated slower price appreciation for homes in the U.S., with a 4.1% gain for 2006 and a 0.5% increase from the third to the fourth quarters.
The states with the greatest rates of appreciation on the Consumer Price Index from the fourth quarter of 2005 to the fourth quarter of last year were: Utah (17.6%), Wyoming (14.3%), Idaho (14.0%), Washington (13.7%) and Oregon (13.5%).
The lowest rates of appreciation for the same period were: Michigan (-0.4%), Massachusetts (0.5%), Ohio (1.0%), Indiana (2.3%) and Minnesota (2.5%).
Is the Housing Correction Over? Attend Construction Forecast Conference
Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed?
Get the answer to these and other questions at the Construction Forecast Conference — Spring 2007 on April 26 in Washington, D.C.
Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference.
For more information and to register, click here.
The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
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Find out in HousingEconomics.com’s Long-Term Forecast.
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NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into the middle of the year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.