The Office of Federal Housing Enterprise Oversight released a report yesterday which indicates that the average rate of home prices is still increasing, but the rate of increase is slowing nationally.
Some states are seeing a decline in prices for the first time since 2002. But overall throughout the United States, prices rose 12.5 percent last year. This year, the annualized increase nationally is expected to be about 8.15 percent, based on first quarter performance.
The greatest appreciation rate is in Arizona, where last year prices appreciated over 35 percent. That appreciation rate is expected to be around 32% this year. Appreciation in Tucson and Phoenix/Scottsdale is much lower than last year for the first quarter.
Prices also continue to rise in Florida, and in areas affected by Hurricane Katrina. Appreciation rates have been strong in New Orleans/Metairie LA and in Hattiesburg MS. Very likely this reflects rebuilding and a renewed interest in the area.
The overall conclusion that analysts are drawing from this data is that while some markets remain strong, buyers have a bit more time and negotiability than they did in recent years. There are more houses on the market, but the increase in interest rates has curtailed the demand somewhat. Those two factors work in favor of buyers.
Housing continues to be a strong sector of the economy, and this is a good time for buyers in many areas. Homes are on the market longer, sellers are adjusting their expectations, but prices are still appreciating.