Freddie: Home Price Rises Slow in 3Q

Freddie Mac has reported that home prices increased at an annualized rate of 3.2% nationwide in the third quarter, down significantly from the revised rate of 8.8% in the second quarter.Annual growth rates in home values peaked at 9.1% between the first quarter of 2000 and the first quarter of 2001 and have been slowing for six quarters, according to the Conventional Mortgage Home Price Index released by Freddie Mac. The index showed that the Pacific states recorded the largest gains in home prices in the third quarter, rising at an annualized rate of 9.0%. The New England states followed with a 7.4% annualized growth rate, and the Middle Atlantic states of New Jersey, New York, and Pennsylvania finished third with a 3.8% growth rate. "The rate of home price growth will continue to ease into 2003, averaging 5.0%-5.5% for the U.S., and certain areas will undoubtedly begin to experience some negative growth," said Frank Nothaft, Freddie Mac's chief economist. "We still do not see a national housing price bubble anywhere in the foreseeable future." The index was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac can be found online at http://www.freddiemac.com.