Mike’s Real Estate Show

Office of Federal Housing Enterprise Oversight
(OFHEO)
NEWS RELEASE
CONTACT: Corinne Russell (202) 414-6921
Stefanie Mullin (202) 414-6376
U.S. HOUSE PRICE APPRECIATION RATE REMAINS
SLOW, BUT POSITIVE
OFHEO House Price Index Shows Four-Quarter Declines in Two States

WASHINGTON, DC – The rate of home price appreciation in the U.S. remained slow but
positive in the first quarter of 2007. The OFHEO House Price Index (HPI), which is
based on data from sales and refinance transactions, was 0.5 percent higher in the firstquarter than in the fourth quarter of 2006.

 This is moderately below the revised growthestimate of 1.3 percent from the third to the fourth quarter of 2006. Prices in the first quarter of 2007 were 4.3 percent higher than they were in the same quarter in 2006.
OFHEO’s purchase-only index, which is based solely on purchase price data, indicates
less price appreciation for U.S. houses than the HPI does over the past year. The
purchase-only index increased 3.0 percent between the first quarter of 2006 and the first
quarter of 2007, compared with 4.3 percent for the HPI.
The figures were released today by OFHEO Director James B. Lockhart, as part of the
quarterly report analyzing housing price appreciation trends.
“Although some forecasters expected to see a drop in the HPI, nationwide house prices continued to rise in the first quarter of 2007, albeit at the lowest rate in 10 years,” saidLockhart. “As always, real estate prices are local with seven states showing double-digitannual appreciation rates and seven with rates less than 2 percent. Seven states,including Florida and California, also showed home price depreciation in the first
quarter.”
Nationally, house prices grew faster over the past year than did prices of non-housing
goods and services reflected in the Consumer Price Index. House prices rose 4.3
percent, while prices of other goods and services, excluding shelter, rose 1.6 percent.
“Low interest rates and unemployment rates continue to prop up house prices in mostmarkets,” said OFHEO Chief Economist Patrick Lawler. “Prices are rising slowly in most areas, however there are some exceptions. For the first time in 7 years, two states —
Massachusetts and Michigan — experienced four-quarter price declines,” Lawler said.
Significant HPI Findings:
Highest and Lowest Appreciation:
1. The states with the greatest rates of appreciation between the first quarter of
2006 and the first quarter of 2007 were: Utah (17.0%), Idaho (12.3%), Montana
(11.7%), Wyoming (11.7%), and Washington (11.6%). The states with the
lowest rates of appreciation for the same period were: Michigan (-0.7%),
Massachusetts (-0.6%), Nevada (0.6%), Ohio (0.8%), and New Hampshire
(1.1%).
2. The Metropolitan Statistical Areas (MSAs) with the greatest rates of
appreciation between the first quarter of 2006 and the first quarter of 2007
were: Wenatchee, Washington (25.6%), Provo-Orem, Utah (19.7%), and Salt
Lake City, Utah (19.1%). The MSAs with the lowest rates of appreciation for
the same period were: Punta Gorda, Florida (-4.6%), Sacramento-Arden-
Arcade-Roseville, California (-4.4%), and Modesto, California (-4.4%).
3. Of the 285 cities on OFHEO’s list of “ranked” MSAs, 237 had positive fourquarter appreciation, 46 had price declines, and prices were unchanged in two cities.
The complete list of state appreciation rates can be found on pages 18 and 19.
The complete list of city (MSA) appreciation rates is available on pages 31-51.
Other Notable Results:
1. The Mountain Census Division continues to have the strongest housing markets.
The four states with the greatest four-quarter appreciation rates were all in that
division: Utah, Idaho, Montana and Wyoming.
2. Of the 20 cities with the greatest four-quarter appreciation, five are in Washington
state. Only five of Washington’s 12 largest metropolitan areas saw four-quarter
appreciation of less than 10 percent.
3. Utah’s three largest metropolitan areas (Salt Lake City, Provo-Orem, and Ogden-
Clearfield) were among the five fastest appreciating cities in the U.S.
4. Prices fell over the most recent four-quarters in two states—Michigan and
Massachusetts. Prices fell in the latest quarter in seven states — California,
Florida, Maine, Massachusetts, Michigan, Nevada, and West Virginia. OFHEO’s
purchase-only index figures show price declines over the quarter in 23 states.
5. Florida is experiencing noticeable deceleration with a four-quarter appreciation
rate of 4.3 percent (between the first quarter of 2006 and the first quarter of
2007), its lowest since the 1998Q4-1999Q4 period. Thirteen of the 18 Florida
cities on the list of ranked MSAs experienced price declines between the fourth
quarter of 2006 and the first quarter of 2007.
6. Twenty-two of the 26 California cities on OFHEO’s “ranked” list experienced price
declines between the fourth quarter of 2006 and the first quarter of 2007.
Highlights/Purchase-Only Index
The purchase-only index increased 0.5 percent (seasonally-adjusted) between the fourth
quarter of 2006 and the first quarter of 2007, the same rate as the HPI. Over the prior
quarter and the prior year, however, the purchase-only index showed slower growth than
the HPI. Between the third and fourth quarters, the purchase-only index rose 0.6
percent (seasonally adjusted) while the HPI increased 1.3 percent. As noted earlier, the
purchase-only index grew about 3.0 percent over the latest four quarters, less than the
4.3 percent growth in the all-transactions HPI.
Differences between the two appreciation measures may reflect differences in the types
of homes refinanced versus those purchased or changing biases in the appraisal
valuations. This topic is discussed in greater detail in the Highlights section (see page 7).
This quarter’s Highlights also directs HPI report users to new purchase-only indexes for
Census Divisions and states, available for download at www.ofheo.gov/download.asp.
Background
OFHEO’s House Price Index is published on a quarterly basis and tracks average house
price changes in repeat sales or refinancings of the same single-family properties.
OFHEO’s index is based on analysis of data obtained from Fannie Mae and Freddie
Mac from more than 32 million repeat transactions over the past 32 years. The more
limited purchase-only index is based on 4.7 million transactions that cover the latest 16
years.
OFHEO analyzes the combined mortgage records of Fannie Mae and Freddie Mac,
which form the nation’s largest database of conventional, conforming mortgage
transactions. The conforming loan limit for mortgages purchased in 2007 is $417,000.
This HPI report contains four tables: 1) A ranking of the 50 States and Washington, D.C.
by House Price Appreciation; 2) Percentage Changes in House Price Appreciation by
Census Division; 3) A ranking of 285 MSAs and Metropolitan Divisions by House Price
Appreciation; and 4) A list of one-year and five-year House Price Appreciation rates for
MSAs not ranked.
OFHEO’s full PDF of report is at: www.ofheo.gov/media/pdf/1q07hpi.pdf. Also, be sure
to visit www.ofheo.gov to use the OFHEO House Price calculator. Please e-mail
ofheoinquiries@ofheo.gov for a printed copy of the report. The next HPI report will be
posted August 30, 2007.
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OFHEO’s mission is to promote housing and a strong national housing finance system by
ensuring the safety and soundness of Fannie Mae and Freddie Mac.