by Calculated Risk on 11/30/2006 10:13:00 AM

OFHEO released the Q3 House Price Index today: House Price Appreciation Slows Further

U.S. home prices rose in the third quarter of this year, but the rate of increase continued to slow and some areas experienced actual price declines. Nationally, home prices were 7.73 percent higher in the third quarter of 2006 than they were one year earlier. Appreciation for the most recent quarter was 0.86 percent, or an annualized rate of 3.45 percent. This reflects a further slowdown from that reported for the second quarter when the quarterly appreciation rate was 1.3 percent and the annualized rate was 5.1 percent. The quarterly increase is the lowest since the second quarter of 1998.

Click on graph for larger image.

This graph shows the effect of refinance data on the HPI. The purchase only index has increased 6.0% over the last four quarters, and increased 0.3% in Q3 (compared to 7.73% and 0.86% for the standard HPI).

The HPI is a lagging price indicator, but clearly shows price appreciation has slowed.