Home Price Appreciation Steady in 4th Quarter

Home Price Appreciation Steady in 4th Quarter

 

According to the federal regulators, 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.

 

The figures released by the Office of Federal Housing Enterprise Oversight  provided the indication of the slowdown in the once-booming housing market.

 

Average home prices rose 1.12 percent in the October-December period, compared with 3.03 percent in the fourth quarter of 2005, the report showed. Over the year, house prices increased by 5.9 percent — a marked slowdown from the 13.2 percent jump in 2005. Still, the report noted, home prices continued to grow faster than prices of other goods and services.

 

The agency 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 locally, "no state had average price declines of as much as one percent," said OFHEO's chief economist, Patrick Lawler.

 

The fourth-quarter figure is derived from an average of home prices in October, November and December.

 

The Commerce Department reported that construction activity fell sharply in January as the housing industry continued to suffer. The weakness in construction was led by a 1.8 percent plunge in spending on home building — the 10th consecutive fall in residential construction.

 

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