Washington, DC, June 2, 2006--Home prices rose at the slowest pace in two years in the first quarter, as some once-hot markets in California saw prices fall.
The Office of Federal Housing Enterprise Oversight said Thursday its home-price index was up 12.5% in the past year and up 2% from the fourth quarter to the first quarter. It was the slowest quarterly gain in prices since the first quarter of 2004. In the fourth quarter, prices were up 13.3% year-over-year and had risen 3.1% quarter to quarter.
"These data show average housing prices still growing stronger than some might have expected," said OFHEO acting director James Lockhart. "They do indicate, however, that price growth is moderating in some parts of the country, particularly in areas where prices have been rising the most."
For the first time since 2002, two states--Iowa and South Dakota--showed price declines from the fourth quarter to first quarter.
Among 275 metro areas, 53 saw prices decline from the fourth quarter to the first quarter, including some previous hot markets in California.
The fastest price appreciation in the past year has been in Arizona, Florida, Hawaii, Oregon, the District of Columbia, Maryland and Idaho. All saw prices rise more than 20% in the past year. Prices in California were up 19.2% in the past year.
Arizona continued to have the fastest growing prices, but its growth rate fell in half during the first quarter. Prices in Arizona are up 32.8% in the past year. The slowest home price gains were in Michigan, Ohio, Indiana, Nebraska, Kansas and Iowa. All had year-over-year price gains of less than 5%.
In the first quarter, prices in 14 states were rising slower than consumer prices.
Among 275 metro areas, St. George, Utah, had the biggest year-over-year gain at 38.4%. It was followed by Naples, Fla. (37.7%), Fort Myers, Fla. (36.9%), Phoenix (36.5%) and Lakeland, Fla. (35.6%).
Some once-hot California markets cooled. Although prices are still up more than 10% year-over-year, prices declined on a quarterly basis in San Jose, Santa Barbara, Santa Rosa, Sacramento and Salinas.
The smallest annual gains were in Saginaw, Mich. (0.1%), Anderson, Ind. (0.8%), Erie, Pa. (1%), Canton, Ohio (1.2%), and Lafayette, Ind. (1.2%). All five of those cities saw prices falling from the fourth quarter to the first quarter.
The OFEHO home-price index is considered to be the most accurate of such measures because it tracks sales and refinancings of the same property over time, meaning changes in the mix of homes being sold do not skew the reading.
Other home-price indicators also show a marked slowdown. The median price of a new home is up 0.9% in the past year. The median price of an existing home is up 4.2%.
