House Prices Continue Double-Digit Appreciation

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House Prices Continue Double-Digit Appreciation

MBA (12/2/2005) Sorohan, Mike Rising interest rates and larger inventories haven't whetted Americans' appetite for buying homes-and home prices continue a five-quarter trend of double-digit appreciation, according to the Office of Federal Housing Enterprise Oversight's quarterly House Price Index. Average U.S. home prices increased by 12.02 percent year over year from the third quarter of 2004 through the third quarter of 2005. This represents a two percentage point decline from the previous four-quarter appreciation rate of 14 percent. Appreciation for the most recent quarter was 2.86 percent. "Appreciation rates in the third quarter were extremely strong, although some deceleration can be seen in a number of the faster-appreciating markets," said OFHEO Chief Economist Patrick Lawler. "Price momentum in the Pacific and New England states, in particular, has pulled back." The country's hot spot, literally and figuratively, remains Arizona, which saw a one-year appreciation rate of 30 percent, the largest of any state by a wide margin. The Phoenix-Mesa-Scottsdale metropolitan statistical area topped all MSAs with a four-quarter appreciation rate of 34.57 percent; last quarter's top MSA, Naples-Marco Island, Fla., dropped to third. Florida also stayed hot as the second fastest-appreciating state, with four-quarter appreciation of 25 percent and 11 of the 20 highest ranked MSAs. Meanwhile, Nevada cooled off a bit. The Silver State's four-quarter appreciation rate declined by more than 10 percent from the previous rate of 28.6 percent to 17.6 percent. Additionally, for the first time since the fourth quarter of 2003, the list of the Top 20 MSAs having the highest appreciation does not contain any Nevada cities. Lawler noted that much of the recent run-up in mortgage rates occurred after the third quarter ended. "To the extent that those increases may have affected prices, those effects will be evident in future quarters," he said. The top 20 MSAs in home price appreciation over the four quarters are: 1. Phoenix-Mesa-Scottsdale, Ariz., 34.57 percent; 2. Cape Coral-Fort Myers, Fla., 33.16 percent; 3. Naples-Marco Island, Fla., 32.35 percent; 4. St. George, Utah, 31.57 percent; 5. Sarasota-Bradenton-Venice, Fla., 30.35 percent; 6. Merced, Calif., 30.27 percent; 7. Coeur d'Alene, Idaho, 29.88 percent; 8. Pensacola-Ferry Pass-Brent, Fla., 29.80 percent; 9. Visalia-Porterville, Calif., 28.46 percent; 10. Palm Bay-Melbourne-Titusville, Fla., 28.36 percent; 11. Prescott, Ariz., 28.31 percent; 12. Orlando, Fla., 28.04 percent; 13. Bakersfield, Calif., 27.07 percent; 14. Modesto, Calif., 26.87 percent; 15. West Palm Beach-Boca Raton-Boynton Beach, Fla., 26.70 percent; 16. Deltona-Daytona Beach-Ormond Beach, Fla., 26.61 percent; 17. Port St. Lucie-Fort Pierce, Fla., 26.60 percent; 18. Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., 26.55 percent; 19. Lakeland, Fla., 26.02 percent; and 20. Stockton, Calif., 25.49 percent. The 20 MSAs with the lowest rate of house price appreciation were: 1. Mansfield, Ohio, 0.76 percent; 2. Greeley, Colo., 2.21 percent; 3. Lafayette, Ind., 2.25 percent; 4. Beaumont-Port Arthur, Texas, 2.43 percent; 5. Detroit-Livonia-Dearborn, Mich., 2.48 percent; 6. Anderson, Ind., 2.62 percent; 7. Jackson, Mich., 2.76 percent; 8. Saginaw-Saginaw Township North, Mich., 2.83 percent; 9. Wichita, Kan., 2.87 percent; 10. Kennewick-Richland-Pasco, Wash., 3.16 percent; 11. Lansing-East Lansing, Mich., 3.26 percent; 12. Warren-Farmington Hills-Troy, Mich., 3.34 percent; 13. Cedar Rapids, Iowa, 3.44 percent; 14. Bloomington-Normal, Ill., 3.51 percent; 15. Burlington, N.C., 3.57 percent; 16. Toledo, Ohio, 3.63 percent; 17. Macon, Ga., 3.77 percent; 18. Jefferson City, Mo., 3.81 percent; 19. Oshkosh-Neenah, Wis., 3.83 percent; and 20. Fort Worth-Arlington, Texas, 3.87 percent. OFHEO's House Price Index is published on a quarterly basis and tracks 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 30.7 million transaction pairs over the past 30 years. 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 2005 is $359,650, and rises to $417,000 effective January 1. OFHEO's HPI report in PDF form is accessible at www.ofheo.gov.

Anne Kazel-Wilcox
Gold Coast Communications
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