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No end visible for rising home prices
OFHEO says second quarter housing prices jumped 13.4 percent
September 7, 2005: 5:42 PM EDT
By Les Christie, CNN/Money staff writer

NEW YORK (CNN/Money) - Federal government figures released last week reveal that U.S. housing prices jumped by 13.4 percent for the 12-month period ending June 30, the largest increase in more than 25 years.

Government officials see no end in sight.

The report quoted Office of Federal Housing Enterprise Oversight (OFHEO) chief economist Patrick Lawler saying, "There is no evidence of prices topping out. On the contrary, house price inflation continues to accelerate, as some areas that have experienced relatively slow appreciation are picking up steam."

The increase in home prices, which OFHEO calculates using average house price changes in repeat sales or refinancings of the same single-family properties, dwarfed the rate of non-housing price increases for the time period, which was a modest 3.1 percent. Housing prices rose more than that – 3.2 percent – for the second quarter alone.

Leaders

Nevada led all states in price appreciation with an increase of 28.1 percent for the 12-months and 5.5 percent for the quarter.

Arizona was second with 27.8 percent for the 12-month period. It had, by far, the fastest growth for the second quarter, however, at 9.7 percent.

Texas recorded the slowest housing price growth of any state in the nation, including the District of Columbia, with just a 4.7 percent bump for the year.

Regionally, both coasts recorded double-digit increase in all regions. New England prices grew 13.0 percent, Middle Atlantic 14.8 percent, South Atlantic 16.7 percent, and Pacific 21.5 percent. The Mountain states increased 15.8 percent for the 12-month period.

All the regions in the middle of the country recorded single-digit increases, including West North Central (7.5 percent), East North Central (6.9 percent), West South Central (5.7 percent), and East South Central (6.6 percent).

California had five of the top ten metropolitan areas for 12-month price growth, but a Florida area, Naples/Marco Island led all metros with 35.6 percent. Second was Bakersfield with 33.9 percent.

Strikingly, none of the 265 metro areas in the country suffered from a net decrease in housing prices over the 12 months. Mansfield Ohio came closest, recording an increase of just 0.4 percent.

Future shock?

Even though the OFHEO officials have observed nothing to indicate a slowdown, they don't believe housing price increases can continue forever.

Lawler said the increases "result from many factors including low mortgage interest rates and the apparent impact of speculative investing.... They are likely unsustainable given the underlying inflation rate, income growth and other factors."  Top of page

*1-Year
rank
State 12-month
gain
2nd Quarter
gain
1 Nevada, (NV) 28.13% 5.51%
2 Arizona, (AZ) 27.82% 9.70%
3 Hawaii, (HI) 25.92% 6.22%
4 California, (CA) 25.16% 5.26%
5 Florida, (FL) 24.45% 6.52%
6 District of Columbia, (DC) 23.53% 5.56%
7 Maryland, (MD) 22.98% 5.73%
8 Virginia, (VA) 20.93% 5.10%
9 New Jersey, (NJ) 17.76% 4.19%
10 Rhode Island, (RI) 16.72% 3.79%
11 Delaware, (DE) 16.53% 3.52%
12 Oregon, (OR) 15.92% 5.12%
13 Washington, (WA) 15.84% 5.29%
14 Vermont, (VT) 15.76% 3.47%
15 New York, (NY) 14.21% 2.89%
16 Connecticut, (CT) 13.61% 2.93%
17 Alaska, (AK) 13.52% 3.80%
** United States 13.43% 3.20%
18 Maine, (ME) 13.37% 2.53%
19 Pennsylvania, (PA) 13.01% 3.22%
20 Idaho, (ID) 12.92% 4.14%
21 Montana, (MT) 12.90% 4.01%
22 New Hampshire, (NH) 12.40% 2.44%
23 New Mexico, (NM) 11.81% 4.18%
24 Massachusetts, (MA) 11.80% 2.30%
25 Wyoming, (WY) 11.41% 2.41%
26 Illinois, (IL) 9.76% 2.32%
27 Wisconsin, (WI) 9.47% 1.97%
28 Minnesota, (MN) 9.32% 2.07%
29 West Virginia, (WV) 9.04% 2.74%
30 North Dakota, (ND) 8.97% 2.58%
31 Utah, (UT) 8.91% 3.28%
32 South Carolina, (SC) 8.11% 2.07%
33 Arkansas, (AR) 8.03% 2.21%
34 Missouri, (MO) 7.71% 1.61%
35 South Dakota, (SD) 7.66% 1.89%
36 Alabama, (AL) 7.45% 2.01%
37 Tennessee, (TN) 6.83% 2.34%
38 Louisiana, (LA) 6.55% 2.01%
39 Georgia, (GA) 6.05% 1.06%
40 Kentucky, (KY) 5.92% 1.41%
41 North Carolina, (NC) 5.88% 0.80%
42 Iowa, (IA) 5.67% 1.64%
43 Colorado, (CO) 5.66% 1.61%
44 Nebraska, (NE) 5.56% 1.52%
45 Kansas, (KS) 5.52% 1.80%
46 Mississippi, (MS) 5.51% 1.51%
47 Oklahoma, (OK) 5.39% 1.80%
48 Michigan, (MI) 4.93% 0.85%
49 Ohio, (OH) 4.81% 0.99%
50 Indiana, (IN) 4.70% 1.13%
51 Texas, (TX) 4.68% 1.75%
*Note: Ranking based on one-year appreciation.
**Note: United States figures based on weighted Census Division average.

See growth rates for 265 metro areas

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As overall prices rise, million-dollar homes become more common. For a look at what a million buys today, click here.

Condo prices are also zooming. For more, click here.

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