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FOR IMMEDIATE RELEASE March 1, 2007 | Office of Federal Housing NEWS RELEASE CONTACT: Corinne Russell (202) 414-6921 Stefanie Mullin (202) 414-6376 | | |
Price appreciation in 2006 was substantially smaller than the tremendous price gains of recent years, which ranged from 7.4 percent in 2002 to 13.2 percent in 2005. The figures were released today by OFHEO Director James B. Lockhart, as part of the House Price Index (HPI), a quarterly report analyzing housing price appreciation trends.
“These data show that, on the whole, prices are still rising, albeit at a much slower pace,” said Lockhart. “This suggests that house price appreciation is, for now, more in line with historical norms.”
House prices grew faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index. House prices rose 5.9 percent, while prices of other goods and services, excluding shelter, rose 0.9 percent.
“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,” said OFHEO Chief Economist Patrick Lawler. “Last quarter, though sharper drops occurred locally, no state had average price declines of as much as one percent,” Lawler said.
Significant HPI Findings:
Highest and Lowest Appreciation:
1. The states with the greatest rates of appreciation between the fourth quarter of 2005 and the fourth quarter of 2006 were:
2. The Metropolitan Statistical Areas (MSAs) with the greatest rates of appreciation between the fourth quarter of 2005 and the fourth quarter of 2006 were:
3. Of the 282 cities on OFHEO’s list of “ranked” MSAs, 256 had positive four-quarter appreciation, 25 had price declines, and prices were unchanged in one city.
The complete list of state appreciation rates can be found on pages 13 and 14.
The complete list of city (MSA) appreciation rates is available on pages 26 - 45.
Other Notable Results:
1. Annual (four-quarter) rates of appreciation slowed in all nine census divisions relative to the third quarter.
2. In the Pacific Census Division, quarterly appreciation is decelerating rather dramatically. Prices grew 0.4 percent between the third and fourth quarter, nearly one full percentage point below the growth rate in the prior period.
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5. Prices in and near areas affected by Hurricane Katrina such as: New Orleans-Metairie-Kenner, LA; Baton Rouge, LA; Houma-Bayou Cane-Thibodaux, LA; Gulfport-Biloxi, MS; Hattiesburg, MS; Pascagoula, MS; and Mobile AL; all showed double-digit increases in 2006, indicating continuing supply shortages.
6. The Mountain Division continues to show relatively robust price growth with higher quarterly and annual appreciation rates than in any other census division. However, the price trends vary widely within the division with quarterly appreciation exceeding 2 percent in
Purchase-Only Index
An index using only purchase price data indicates less price appreciation for
Highlights
This quarter’s Highlights compares recent price trends in close-in city suburbs to those in more distant communities. The analysis suggests that in
Background
OFHEO’s House Price Index is published on a quarterly basis and tracks average house price changes in repeat sales or refinancings of the same single-family properties. OFHEO’s index is based on analysis of data obtained from Fannie Mae and Freddie Mac from more than 32 million repeat transactions over the past 32 years. The more limited “purchase-only” index is based on 4.7 million transactions.
OFHEO analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased in 2006 and 2007 is $417,000.
This HPI report contains four tables: 1) A ranking of the 50 States and
Also, beginning with this release, index values are included for two new metropolitan areas:
OFHEO’s full PDF of report is at: www.ofheo.gov/media/pdf/4q06hpi.pdf. Also, be sure to visit www.ofheo.gov to use the OFHEO House Price calculator. Please e-mail ofheoinquiries@ofheo.gov for a printed copy of the report. The next HPI report will be posted May 31, 2007.
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OFHEO's mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac.
