Home prices have shown positive growth but slowest in ten years. These are based on actual comparisons of sales prices or appraisal figures for homes purchased or refinanced over the past 32 years. If a house has had two mortgage closings through Freddie Mac (Federal Home Loan Mortgage Corporation – FHLMC) or Fannie Mae (Federal National Mortgage Association - FNMA) during that period, it is included in the transaction data base. A limitation of this methodology is that if a home sale goes through a different funding source, seller financing or other sub-prime market or is purchased with cash, they will not be included in the survey population.

The advantage of this methodology is it comparing apples to apples. A house purchased in 1986, refinanced in 1992, sold again in 2000 and refinanced in the first quarter of 2007 will have four data points in the system upon which to build a picture of the changes in sale prices.
The disadvantages of course are that there is no way to account for property improvements which would make home price increase further than the general escalation in the area and higher priced properties are not included in survey as they are financed in some instances by other companies.

OFHEO Director James B. Lockhart said "Although some forecasters expected to see a drop in the HPI, nationwide house prices continued to rise in the first quarter of 2007, albeit at the lowest rate in 10 years. As always, real estate prices are local with seven states showing double-digit annual appreciation rates and seven with rates less than 20 percent. Seven states, including Florida and California, also showed home price depreciation in the first quarter."

Still, house prices grew faster over the past year than prices of non-housing goods and services. The 4.3 growth in home price appreciation compares favorably to the non-housing Consumer Price Index of 1.6 percent.

Data on hundreds of large and medium sized metropolitan areas are included in the OFHEO study. To see how your locality ranks over the last quarter, year, and/or five year period in terms of house price appreciation, you can visit the website www.ofheo.gov.