Federal report: Home prices still going up

NEW YORK (CNNMoney.com) -- Home prices increased during the three months ended June 30, albeit only slightly, according to the latest quarterly report from the Office of Federal Housing Enterprise Oversight (OFHEO).

The OFHEO House Price Index (HPI) rose 0.1 percent compared with the first quarter of 2007 and 3.2 percent compared with the second quarter of 2006. The HPI includes data on houses purchased as well as those refinanced.

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The OFHEO Purchase-Only Index, which excludes refinancings, produced slightly different results with quarter-to-quarter prices up 0.5 percent but year-over-year prices only 2.6 percent higher.

Coming during a period of intense turmoil in credit markets, other reports from the National Association of Realtors and the Case-Shiller Home Price Index showing price declines and dire predictions of future home price depreciation, the report came as a pleasant surprise.

Said OFHEO Director James B. Lockhart, as quoted in the report release, "House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment. Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom."

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Among the states, Utah, at 15.3 percent, had the highest year-over-year price growth. Its next-door neighbor, Wyoming, trailed closely behind with 12.8 percent. They were the only two double-digit gainers. Washington State was a 9.1 percent winner.

Losers included Nevada, down 1.5 percent year-over year, Michigan (-1.4 percent) and California (-1.4 percent).

Wenatchee, Washington, where prices ballooned 23.5 percent, led all metro areas in price appreciation. Other big gainers included Provo-Orem, Utah (18.2 percent), and Salt Lake City (16.0 percent).

Three California metro areas suffered the largest drops in price for the same period: Merced (-8.7 percent), Santa Barbara (-8.1 percent), and Stockton, (-7.2 percent). Other metro areas among the bottom 10 included Punta Gorda, Florida (-7.1 percent) and Sarasota (-6.2 percent).

Of the bottom 20 metro areas, only Reno, Nevada and Bay City, Michigan were from outside of Florida or California. Sixty-one of OFHEO's list of 287 metro areas recorded year-over-year price declines with 226 recording growth.