Avg. U.S. Home Price Jumps 12 Percent in Q3
{{#rendered}} {{/rendered}}Average U.S. home prices jumped 12.02 percent from the third quarter of 2004 to the same period this year, a slowing from the record pace of the previous quarter yet still a strong increase, federal regulators reported Thursday.
The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae (FNM) and Freddie Mac (FRE), were the latest sign of a gradual cooling of the red-hot housing market. The Commerce Department reported Tuesday that sales of new homes jumped to an all-time high in October, in what could be a final spurt from a housing market that is expected to slow after five record-breaking years.
Rates of increase in home prices in the third quarter "were extremely strong, although some deceleration can be seen in a number of the faster-appreciating markets," OFHEO's chief economist, Patrick Lawler, said in a statement issued with the report. "Price momentum in the Pacific and New England states, in particular, has pulled back."
{{#rendered}} {{/rendered}}The agency noted that house prices grew far more rapidly over the last year than prices of other goods and services included in the Consumer Price Index — 12 percent versus 4.5 percent.
Average home prices rose 12.02 percent on an annualized basis from the July-September quarter of 2004 to the third quarter of this year, the new OFHEO report showed. That was down from a 13.4 percent increase from the second quarter of 2004 to the same period this year, which was the biggest rise for a comparable span in more than a quarter-century.
The third-quarter figure is derived from an average of prices in July, August and September. Prices in that July-September period were up 2.86 percent from the second quarter.
{{#rendered}} {{/rendered}}The OFHEO report, based on data from Fannie Mae and Freddie Mac on repeat sales and refinancings of single-family homes, also found that:
— Growth in home prices in Arizona continues to accelerate, with a one-year rate of increase of 30 percent — the largest of any state by a wide margin.
— Florida took the No. 2 spot, with a one-year rate of increase of 25 percent. Eleven of the 20 priciest metropolitan areas for homes nationwide are located in the state.
{{#rendered}} {{/rendered}}— Nevada's one-year appreciation rate dropped by more than 10 percentage points, from 28.6 percent to 17.6 percent. For the first time since the fourth quarter of 2003, the top 20 metropolitan areas do not include any Nevada cities.
— Idaho and Utah continue to show noticeable appreciation in house prices, with rates of 15.1 percent and 11.4 percent, respectively.
— With a one-year growth rate of 34.4 percent, the Phoenix-Mesa-Scottsdale area in Arizona topped the list of the fastest appreciating metropolitan areas for the first time since 1995. The second quarter's top metropolitan area, Naples-Marco Island in Florida, fell to third place.
{{#rendered}} {{/rendered}}The Commerce Department report for October said that while the median, or midpoint, price of a new home rose to $231,300, that was up just 0.9 percent from the median price in October 2004 and far below the double-digit annual price gains that sellers had been enjoying.