The Office of Federal Housing Enterprise Oversight "House Price Index" Shows Smallest Quarterly Increase Since 1994.
US home prices increased only slightly in the second quarter of 2007. according to the OFHEO House Price Index (HPI). The HPI is based on the sales and refinance transactions and was just 0.1% higher in the second quarter of 2007 than it was in the first quarter. Prices in the second quarter of 2007 were 3.2% higher than they were in the same quarter of 2006, the lowest annual price change since the 1996-97 period.
OFHEO's purchase-only index, based solely on purchase price data, indicated less appreciation for US homes over the past year than does the all-transactions HPI. The purchase only index increaseed 2.6% betwen the second and first quarters of 2007, compared to the 3.2% mentioned above for the HPI. However, for the second quarter, the purchase-only index increase was slightly higher at 0.5%.
Director James Lockhart said, "House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer enthusiasm. Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom." (Like in much of Florida - John Elwell)
In the period covered in the OFHEO report house prices grew faster than did prices of non-housing goods and services reflected in the Consumer Price Index (CPI). House prices rose 3.2% while the prices for other goods rose just 2.1%.
The West South Central and Mountain Zones showed the greatest appreciation with an average rate of 6%. New England continued to lag behind all of the other parts of the country with a 0.5% appreciation rate between the second quarters of 2007 and 2006.
Results concerning urban centers with the lowest appreciation rates showed that 18 cities with the lowest rates were in Florida and California.
SOURCE: OFHEO Press Release