WASHINGTON, D.C. Average U.S. home prices increased 12.50 percent from the first quarter of 2004 through the first quarter of 2005. Appreciation for the most recent quarter was 2.21 percent, or an annualized rate of 8.82 percent. The new data represent the largest four quarter increase since the third quarter of 2004, when appreciation surpassed any increase in over 25 years. The figures were released today by OFHEO Acting Director Stephen A.Blumenthal, as part of the House Price Index (HPI), a quarterly report analyzing housing price appreciation trends.
"The House Price Index shows the rise in house prices continues at an extremely strong pace and raises the potential for declines in some areas later on," said OFHEO Chief Economist Patrick Lawler.
House prices grew considerably faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index. House prices rose 12.5 percent, while prices of other goods and services rose only 3.1 percent.
The biggest price increases in the HPI during the past year occurred in Nevada, with a 4 - quarter increase of 31.2 percent. With the latest annual data, California overtook Hawaii to become the state with the second fastest growing house price appreciation. The smallest increases occurred in Colorado, Ohio, Oklahoma, Indiana and Texas. Other significant findings in the HPI:
1. Arizonas annual house price appreciation has accelerated significantly in the last year, rising 19.4 percent compared to 7.7 in the preceding year.
2. Utah is showing increasing price momentum. In the latest period, the annual appreciation rate for Utah grew to 6.3 percent and the state now ranks 35th compared to the fourth quarter of 2003 when it ranked last among all states.
3. The list of the 20 fastest appreciating MSAs remained largely unchanged from the previous quarter, with 14 of the 20 fastest growing MSAs in California, 4 in Florida, and 2 in Nevada.
4. As in the previous quarter, the top three Census Divisions were the Pacific, South Atlantic and Mid-Atlantic Divisions.
5. Despite mildly accelerating appreciation, the New England Division fell from 4th to 5th place in terms of its annual appreciation rates.
6. The Mountain Division has seen a steady increase in its growth rate. In the first quarter of 2005, it had the fourth highest 4-quarter appreciation (12.96 percent), a substantial acceleration since its 3.6 percent increase in the third quarter of 2003.
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