Industry News

U.S. home-price growth slows in first quarter

Higher mortgage rates cut into appreciation

Freddie Mac today announced that its Conventional Mortgage Home Price Index increased by 8.7 percent on an annualized basis in the first quarter of 2006, down from a revised fourth-quarter-2005 rate of 12.9 percent and a third-quarter-2005 growth rate of 13.7 percent. Nationally, home values increased 12.7 percent from the first quarter of 2005 through the first quarter of 2006, down from the 12.9 percent annual growth seen over the four quarters ended in March 2005. "Home prices are starting to feel the effects of the upward trend in mortgage rates," said Frank Nothaft, Freddie Mac vice president and chief economist. "That trend continued during the first quarter with 30-year fixed mortgage rates climbing from an average 6.15 percent in January to 6.32 percent in March, according to the Primary Mortgage Market Survey. Rates on adjustable-rate mortgages rose even faster, with the introductory rates on 1-year Treasury-indexed ARMs rising from an average of 5.16 percent at the start of...