Industry News

Home-price growth hits the brakes

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Home-price growth has slowed in Freddie Mac's quarterly national Conventional Home Price Index released today, adding to evidence the nation's housing market is cooling. Freddie Mac's home-price-growth index rose 12.5 percent in the fourth quarter on an annualized basis, down from a revised third-quarter-2005 annualized rate of 13.4 percent and a second-quarter-2005 growth rate of 15.4 percent. "Mortgage rates rose sharply in the fourth quarter and we are starting to see marked slowing in the rate of home-price appreciation," said Frank Nothaft, Freddie Mac vice president and chief economist. The monthly average for fixed-rate mortgages and 5/1 adjustable-rate mortgages rose about one-half of a percentage point between September and December, he said. Rates on one-year ARMs also increased. Freddie Mac expects mortgage rates to rise gradually throughout this year, causing housing activity to ease, Nothaft added. "We've now seen two consecutive quarters of moderation in home-value growt...