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Economy in Brief

Home Price Appreciation Weakest Since 1990
by Tom Moeller February 27, 2008

According to the Office of Federal Housing Enterprise Oversight (OFHEO) home prices in the U.S. rose just 0.1% last quarter. That rounded out a year end gain of just 0.8%, and of 2.8% for the full year. These rates of increase were the slowest since the 1990s, although the slowing did follow gains earlier this decade which were the strongest since the late 1970s.

The House Price Indices in this report are weighted indexes based on repeat sales or refinancings using data provided by Fannie Mae or Freddie Mac. The overall figures are available in Haver's USECON data base and the state figures are in US REGIONAL

Home price performance varied greatly last year across the country to net out at the slight 0.8% overall uptick. Down hard were home prices in California though rates of appreciation slowed most every where. A 6.6% decline in prices 4Q/4Q was followed just barely by a 4.7% rate of decline in Florida. These declines pulled prices down for the full year but both annual shortfalls followed double digit gains in 2006. That was not, however, the pattern in Michigan where prices have declined steadily since 2005.

If prices in other regions did rise 4Q/4Q the rates of increase were down most everywhere. New York squeezed out a 0.7% price increase last year but it followed much more respectable gains in 2006 and 2005. The same pattern was true for neighboring New Jersey and Pennsylvania.

In the South and certainly in the West, other than in California, home price appreciation barely took a breadth. For the full year 2007, double digit gains in Wyoming were accompanied by respectable price increases in Texas and South Carolina. Neighboring North Carolina and Tennessee did well as well.

The latest report from the Office of Federal Housing Enterprise Oversight (OFHEO) can be found here.

House Price Index (OFHEO, %) 4Q '07 3Q '07 Y/Y 2007 2006 2005
United States 0.1 -0.2 0.8 2.8 8.2 11.8
  California -3.1 -1.9 -6.6 -2.7 11.5 23.3
  Florida -1.7 -2.1 -4.7 -0.3 17.2 25.6
  Michigan 0.1 -2.5 -4.3 -2.7 -0.2 3.9
  Massachusetts 0.8 -1.4 -2.2 -1.6 1.9 9.7
  Wyoming 0.3 2.7 8.3 11.2 13.5 11.8
  Texas 0.7 1.0 5.2 6.4 6.3 4.6
  South Carolina 1.6 0.1 3.8 5.7 8.3 7.8
  New York 0.6 -0.6 0.7 2.2 8.2 13.4
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