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Home Prices Continue To Rise, But At A Slowing Pace

The rate of U.S. home price appreciation steadied in the fourth quarter, extending a trend of deceleration that began earlier in 2006, the U.S. Office of Federal Housing Enterprise Oversight reported on Thursday.

Home prices, based on repeat sales and refinancings, were 1.1% higher in the fourth quarter than they were in the previous quarter, slightly above the revised growth estimate of 1.0% from the second quarter to the third.

Home prices in the fourth quarter of 2006 were 5.9% higher than in the same quarter a year earlier.

"These data show that, on the whole, prices are still rising, albeit at a much slower pace," OFHEO director James Lockhart said in a release, adding: "This suggests that house price appreciation is, for now, more in line with historical norms."

Home price appreciation in 2006 was substantially smaller than the large gains garnered in previous years, ranging from 7.4% in 2002 to 13.2% in 2005.

OFHEO's figures were released by Lockhart as part of the House Price Index, a quarterly report analyzing housing price appreciation trends.

House prices grew faster over the past year than did prices on non-housing goods and services reflected in the Consumer Price Index. House prices rose 5.9%, while prices of other goods and services, excluding shelter, rose 0.9%.