Home Price Appreciation Slows in 3Q

The bull market in home prices appears to be coming to an end, at least for now. According to a new report released by the Office of Federal Housing Enterprise Oversight, average home prices increased by just 0.84% in the third quarter, compared with 2.34% in the second quarter.OFHEO, the regulator of Fannie Mae and Freddie Mac, noted that seven states and 33 metropolitan statistical areas (of 185 tracked) actually experienced a decline in home values during the quarter. On the other hand, some MSAs continued to have stellar home price growth. Nassau-Suffolk (in Long Island) saw values rise 4.08% in the quarter, ranking first among all MSAs. Yolo, Calif., ranked second in appreciation (3.8%), followed by Redding, Calif. (3.65%), Fresno, Calif. (3.61%), and Riverside-San Bernardino, Calif. (3.22%). OFHEO's analysis is based on Fannie/Freddie transactions. Freddie Mac chief economist Frank Nothaft said the rate of home price growth will continue to ease in 2003, adding, "We still do not see a national housing bubble anywhere in the foreseeable future." (See the Dec. 9 issue of National Mortgage News for more details.)