1Q Home Prices Rose at Slowest Rate in 10 Years

House prices rose at a 1.8% annualized rate in the first quarter, the slowest rate in a decade, according to the Office of Federal Housing Enterprise Oversight.The OFHEO house price index shows that price appreciation has come down dramatically from an 8.9% annual rate in the first quarter of 2006, but it did not fall into negative territory. "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," OFHEO Director James McLaughlin said. From the fourth quarter to the first quarter, house price rose by 0.5%, and a separate home purchase index (which excludes refinancing transactions) also rose by 0.5%. However, "the purchase-only index grew about 3% over the latest four quarters, less than the 4.3% growth in the all-transactions HPI," OFHEO said. A national house price index published by Standard & Poor's/Case-Shiller and released earlier indicated that house prices declined at a 1.4% annual rate in the first quarter.