Freddie Mac reported last week that its quarterly national Conventional Mortgage Home Price Index (CMHPI) rose 12.1% for the period from 3Q04 through 3Q05. For the quarter, home prices grew 2.9%, or 12.3% annualized. This is down from the second quarter's revised annualized rate of 15.3%, previously reported as 13.2%.
In a related development, the Office of Federal Housing Enterprise Oversight reported similar results the previous week, noting that over the period from 2Q04 through 3Q05, home prices rose 12.02%. This was down, however, from the previous four-quarter timeframe, which recorded a 14.01% jump. For the third quarter, appreciation was 2.86%, down from 3.55% in the second quarter.
"The gradual rise in mortgage rates during the third quarter moderated home price gains, compared with the second quarter," said Freddie Mac's Chief Economist Frank Nothaft. According to Freddie's primary mortgage market survey, the weekly average rate for fixed-rate mortgages and for 5/1 hybrid ARMs rose roughly three-eights of a percentage point from the end of June to the end of September. Meanwhile, 30-year fixed-rate mortgages increased to a 5.91% average rate as of Sept 29, from 5.53% as of June 30.
Meanwhile, Freddie's Deputy Chief Economist Amy Crews Cutts stated that by region, "the CMHPI continues to show strong growth primarily along the coast areas where the population is growing rapidly, mob growth is strong and land scarcity is pushing up the cost of housing." For example, the South Atlantic Division recorded the fastest home price appreciation over the past 12 months at 17.6%. For the quarter, this area recorded a 4.6% gain, or 19.5% annualized. The second region showing the largest home price appreciation over the past year is the Pacific Division at 17.3%. For the quarter, home values rose 3.6%, translating to an annualized 15.2%.
The Mountain division recorded a strong third quarter growth of 4.6%. Over the past 12 months, growth has been an impressive 16.2%. Meanwhile, the West South Central and West North Central Divisions registered the slowest growth, at 1.5% for the quarter. Over the past 12 months, home values have increased 6.2% in the West South and 6.6% in the West North.
Freddie Mac also reported that by state, the hottest housing market was in Arizona, witnessing annual home value gains of 31.3% over the year through the third quarter. The most lackluster appreciating market was in Michigan, where home values crept up 4.1% over the same one-year period.
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