Industry News

Home prices grow at slowest pace in 8 years

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U.S. home prices appreciated 6.1 percent during 2006, which is the slowest calendar-year growth rate since 1999 when prices gained 5.4 percent, and is much lower than the 13.3 percent annual growth reported in 2005, Freddie Mac reported today. According to Freddie Mac's Conventional Mortgage Home Price Index (CMHPI), price appreciation in the fourth quarter rose 4.9 percent on an annualized basis, up from a revised third-quarter rate of 4.4 percent, but was impacted strongly by the slowdown in sales. "Home sales fell 11 percent from the fourth quarter of 2005 to the final quarter of 2006, with especially large declines in markets that have experienced high housing costs and fast appreciation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. "Freddie Mac's index shows that this drop in sales has also led to a substantial slowdown in home-value appreciation, and a drop in values in some markets where the economy is weak or housing costs have gotten ver...