Freddie: '04 Home Prices Rose 10.7%

Home prices increased at a 10.7% rate nationwide in 2004, up from 8.4% the year before, according to Freddie Mac.In the fourth quarter, the annualized home price appreciation rate was 9.0%, Freddie Mac said in releasing the Conventional Mortgage Home Price Index. The index showed that the Pacific states recorded the largest gains in home prices, which rose 17.7% for the year. The South Atlantic states followed with a 14.1% growth rate, and the Middle Atlantic states of New Jersey, New York, and Pennsylvania finished third with a 13.5% rate. "We are forecasting annual home price appreciation nationally at between 7% and 8% in 2005," said Frank Nothaft, Freddie Mac's chief economist. "Strong home sales and higher values should propel purchase-money mortgage originations to another record this year -- at around $1.51 trillion, up from 2004's estimated $1.48 trillion -- but total originations will likely decline due to smaller refinance volumes caused by the predicted rise in interest rates." The index was jointly developed by Freddie Mac and Fannie Mae.