Housing Price Growth Slowing, Returning to "Historic Average"

WASHINGTON – The record high prices homeowners have been able to fetch on their houses may be slowly coming to an end. A quarterly report from the Office of Federal Housing Enterprise Oversight released as part of OFHEO’s Housing Price Index, shows house prices are still rising but at a continuing slowing pace. Economist say mortgage interest rates and national unemployment are both contributing to the trend. The average U.S. home prices increased 5.56% from the second quarter of 2002 – the second quarter of 2003, and increased 0.78%, or an annualized rate of 3.12%, in the second quarter of 2003. That’s a rate of growth that’s been lower than the previous quarter for every one of the last four quarters, OFHEO said. OFHEO Director Armando Falcon said if the deceleration in price growth continues over the next few quarters, it “indicates a gradual and orderly return to the historic average, rather than the bursting of a price bubble.” Among some of the other significant findings in the HPI: * of the 220 ranked Metropolitan Statistical Areas (MSAs), 19 experienced negative quarter growth. * California continues to dominate the Top 20 MSAs in home prices.