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Housing Prices increase 25%
Is it the top- Is it a bubble, if FOMC continues to raise rates (as they have committed to) where will that leave the housing market? Have Americans paid off credit card debt + financed a vacation, maybe bought a new car with their equity~what happens when rates increase along with housing costs?
Date: 6/2/2005 10:06:07 AM ( 19 y ) ... viewed 1108 times Bonds News
UPDATE 1-US home prices climb 12.5 pct from year ago--OFHEO
Wed Jun 1, 2005 11:09 AM ET
(Adds details, paragraphs 4-9)
WASHINGTON, June 1 (Reuters) - Average U.S. home prices in the first quarter climbed 12.5 percent from a year earlier, pushed higher by low mortgage rates, income growth and speculation in some markets, the Office of Federal Housing Enterprise Oversight said on Wednesday.
Home values appreciated 2.21 percent during the first quarter from the fourth quarter of 2004, or at an annual rate of 8.82 percent.
"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 Patrick Lawler, chief economist for the federal financial regulator of mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) .
The 12.5 percent increase in home prices over the past year marked the biggest four-quarter jump since the third quarter of 2004, when appreciation surpassed any increase recorded in more than 25 years, OFHEO said.
Lawler cited low interest rates, income growing and "the apparent impact of speculation" in some markets for the sustained gains in home prices.
The biggest price increases in the index over the past year were in Nevada, with a four-quarter jump of 31.2 percent, OFHEO said. California, with a 25.4 percent price increase, overtook Hawaii to become the state with the second-quickest house price appreciation.
Washington, D.C., came in fourth, with prices up 22.2 percent over the year.
The smallest increases occurred in Colorado, Ohio, Oklahoma, Indiana and Texas, OFHEO said.
No states posted declines.
© Reuters 2005. All Rights Reserved.
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Companies mentioned in this article
Data as of 2 Jun 2005 11:04 ET. Delayed at least 15 to 20 minutes.
Symb Company Last Chg Chg %
FNM.N FANNIE MAE 59.12 +0.18 +0.31%
FRE.N FREDDIE MAC 66.58 -0.10 -0.15%
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq and all other quotes delayed by at least 15 minutes.
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