This morning the Office of Federal Housing Enterprise Oversight reported its quarterly House Price Index for the second quarter. During the quarter, HPI was 0.1% higher in the second quarter from a revised growth rate of 0.6% in Q1 2007. This means an annualized rate of 0.33% in Q2 versus 2.22% in Q1. "House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment, " said OFHEO Director James Lockhart. "Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom." The report also noted that prices in the second quarter were 3.2% higher compared with the same quarter of 2006. This is down from 4.45% OFHEO reported in Q1 and is the lowest annual price change since 1996 to 1997 period. OFHEO's purchase-only index saw an increase of 2.6% between 2Q06 and 2Q07. However, for the second quarter only, the purchase-only index was slightly higher (versus the HPI) at 0.5%. The areas of the country experiencing the best home price growth are the West South Central and Mountain areas. The top three states in terms of one-year growth are Utah (15.3%), Wyoming (15.8%) and Washington (9.1%). Former top growth states such as Arizona, California and Florida recorded growth of +2.2%, -1.4%, and +1.3%. The lowest three states were California, Michigan (-1.4%) and Nevada (-1.5%). The top three Metropolitan areas in terms of home price appreciation were Wenatchee, WA (23.5%), Provo-Orem, UT (18.2%) and Salt Lake City, UT (16.0%). The three areas reporting the lowest growth were: Oxnard-Thousand Oaks, Ventura, CA (-4.3%), Vallejo-Fairfield, CA (-4.2%) and Bay City, MI (-4.2%).

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