Average U.S. home prices increased 9.36 percent from the second quarter of 2003 through the second quarter of 2004, according to figures released today from the Office of Federal Housing Enterprise Oversight’s House Price Index.

Appreciation for the most recent quarter was 2.21 percent, or an annualized rate of 8.83 percent, according to OFHEO’s index, a quarterly report that analyzes housing-price appreciation trends.

“The appreciation over the past year is the largest four-quarter increase since 1979,” said Patrick Lawler, chief economist at OFHEO. “These data show no signs of the long-anticipated, and ultimately inevitable, slowing of house-price inflation.” The quarterly appreciation is more than 50 percent faster than the upward revised 1.45 percent increase in the first quarter of 2004. Over the past four quarters, house price rises far exceeded gains in the prices of non-housing goods and services incorporated into the Consumer Price Index. House prices rose 9.36 percent, while the price of other goods and services rose 3.03 percent.

The four states experiencing the greatest increases over the past year are: Nevada, Hawaii, California and Rhode Island. Like last quarter, the smallest increases occurred in Utah, Texas and Indiana. However, this time no states experienced negative quarterly growth.

By region, price changes have actually slowed in the New England and West South Central (Arkansas, Louisiana, Texas and Oklahoma) Census divisions. New England “slowed” to a 10.65 percent increase, while West South Central prices rose only 3.83 percent – the smallest increase of all census divisions.

OFHEO’s House Price Index reflects price movements on a quarterly basis of sales or refinancings of single-family homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac.

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