2005 Was a Very Good Year for Home Owners

Home prices rose an average of 13 percent last year, according to a report released by the Office of Federal Housing Enterprise Oversight, the agency that manages mortgage giants Fannie Mae and Freddie Mac.The report pointed out that home prices grew far more rapidly last year than the prices of other goods and services included in the Consumer Price Index (12.95 percent vs. 4.3 percent, respectively).It also noted:

1. Home prices grew by record levels during the fourth-quarter yearly span in 26 metropolitan areas around the U.S.


2. Growth in home prices in Arizona continues to accelerate, with a one-year rate of increase of 39.7 percent in the Phoenix-Mesa-Scottsdale area — the largest of any metropolitan area.


3. The Mountain states became the area with the fastest-growing home prices, edging out the Pacific region. The slowest growth in prices continues to occur in Illinois, Indiana, Michigan, Ohio, and Wisconsin.


4. Home prices in the East Coast states from Maryland to Florida showed their fastest growth rate since 1975, when the OFHEO survey began. Prices in the region jumped by 17.8 percent from the fourth quarter of 2004 to the same period last year.

"Despite recent indications that a slowdown may be forthcoming, house-price appreciation during 2005 continued to hover at near-record levels," says OFHEO's chief economist Patrick Lawler."While deceleration continues in some areas, appreciation generally is still extremely strong," Lawler says. "Mortgage rates climbed significantly during the second half of last year, but the effect of that increase on price appreciation so far appears to be limited."Source: Associated Press, Marcy Gordon (03/02/06)