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Economy in Brief

Home Prices Rose More Slowly
by Tom Moeller June 1, 2006

Home prices as measured by the Office of Federal Housing Enterprise Oversight (OFHEO) rose another 2.0% last quarter. The increase was the slowest after rising between 2.5% and 4.5% each quarter for two years.

The OFHEO house price index is a geometric weighted average based on more than 26.5 million repeat transactions (purchase or refinance) over 29 years and 12,000 transactions annually.

Year to year, the 12.5% gain in prices nationwide was the slowest since late 2004.

The purchase only home price index rose 1.8% (10.1% y/y), also its slowest gain in nearly three years after quarterly gains which ranged between 2.1% and 2.9%.

Slower growth in home prices ranged across the country but was pronounced in Massachusetts where prices rose just 0.5% (6.5% y/y). That y/y gain is down from a peak of 14.4% in 2000 and 10.1% last year. Prices also inched up just 0.2% (2.9% y/y) in Michigan, the slowest y/y gain since 1993. In South Dakota, home prices fell 0.1% (+6.1% y/y).

In New York, house prices rose 1.9% (12.4% y/y) and in California prices rose 2.5% (19.2% y/y), a slowdown from the 28.0% y/y gain in late 2004.

House price appreciation continued strong in Florida as evidenced by a 4.3% (26.6% y/y) gain. Last year prices in Florida rose 25.9% and in 2004 were up 17.0%.

View the latest OFHEO release here.

OFHEO 1Q06 4Q05 Y/Y 2005 2004 2003
House Price Index 2.0% 3.1% 12.5% 13.3% 10.8% 6.9%
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