Mortgage rates fall as housing market cools
Page | 1 | 2 |

The Realtors reported that resales of houses, town houses, condos and co-ops fell 2.8 percent in January compared to December, and fell 5.2 percent compared to the previous January. The median price was the same as it was in December: $211,000.

OFHEO, otherwise known as the Office of Federal Housing Enterprise Oversight, conducts a more rigorous (and probably more accurate) survey of home values, but the information isn't as new. Its house price index shows that, nationwide, home values increased 13 percent in 2005.

"Despite recent indications that a slowdown may be forthcoming, house price appreciation during 2005 continued to hover at near-record levels," Chief Economist Patrick Lawler said in a statement. He added, "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."

Everyone gained except Burlington, N.C.
The Phoenix-Mesa-Scottsdale, Ariz., metro area had the fastest price appreciation in 2005, at 39.67 percent. That was followed by Naples-Marco Island, Fla., 38.89 percent; Cape Coral-Fort Myers, Fla., 36.19 percent; St. George, Utah, 35.27 percent, and Prescott, Ariz., 31.89 percent.

Of the 275 metro areas in OFHEO's survey, Burlington, N.C., was the only one where home values fell in 2005 -- by 1.16 percent. The rest of the bottom five are Bay City, Mich., with values rising 0.43 percent; Sioux City, Iowa, 1.32 percent; Greeley, Colo., 1.72 percent, and Lafayette, Ind., 2.02 percent.

OFHEO also took a look at what happened to real estate values in the Gulf Coast areas affected by Hurricane Katrina. It found that in parts of New Orleans that were the least damaged by flooding prices grew 6.5 percent in the final four months of the year. That's an annual rate of close to 20 percent.

Katrina's effect
In Gulfport-Biloxi, Miss., home prices jumped about 8 percent in the final four months of the year -- an annual rate of almost 25 percent.

Rising prices in New Orleans and Gulfport-Biloxi can be attributed to housing shortages -- a lot of homes were destroyed, so intact houses gained value. Something similar happened in nearby areas where former coastal residents are moving inland and settling down: In the last four months of the year, home values gained 3 percent to 5 percent in Baton Rouge, La.; Lafayette, La., and Hattiesburg, Miss.

Note: The TrueCredit-commissioned survey was conducted last fall by Roper Public affairs, which contacted 1,004 randomly chosen Americans, 755 of whom identified themselves as homeowners. The survey has a margin of error of plus or minus 3 percentage points.