Home Prices Leveling Off
Local Rate of Increase for 4th Quarter Trails Country's
A new home goes up in Lehi, Utah, where the price of houses statewide rose 17.6 percent in 2006, nearly three times the national average of 5.9 percent. Home prices rose more than 7 percent in the District, Maryland and Virginia.
(By George Frey -- Bloomberg News)
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Friday, March 2, 2007
The rate of increase in U.S. home prices remained steady in the fourth quarter of 2006, extending the slowing trend that began earlier in the year, federal regulators reported yesterday.
Average home prices rose 1.12 percent in the October-December period, compared with 3.03 percent in the fourth quarter of 2005, according to a report by the Office of Federal Housing Enterprise Oversight, which oversees mortgage-finance companies Fannie Mae and Freddie Mac. Over the year, home prices increased by 5.9 percent, compared with a 13.2 percent jump in 2005.
"This suggests that house-price appreciation is, for now, more in line with historical norms," OFHEO Director James B. Lockhart said of the data in a statement.
Locally, prices in the quarter increased even more slowly than they did nationally. In the District and some of its suburbs, prices appreciated just 0.3 percent in the quarter, but 6.31 percent over the year. In the Montgomery-Frederick County area, which the government measures separately, prices rose just 0.06 percent in the quarter and 5.48 percent over the year.
In the District, prices rose 2.06 percent in the quarter and 7.54 percent for the year. For Maryland, the quarterly increase was 0.86 percent and the one-year increase was 9 percent. In Virginia, prices rose 1.12 percent in the quarter and 7.46 percent over the year.
OFHEO said that in the second half of 2006, continued strength in the economy and declining interest rates for borrowers prevented a more severe fall in the housing market. In the fourth quarter, though sharper price drops occurred in some areas, "no state had average price declines of as much as 1 percent," said Patrick Lawler, the agency's chief economist.
The fourth-quarter figure is derived from an average of home sales and refinancings in October, November and December. The number tracks changes in the price of the same home over time.
