The Office of Federal Housing Enterprise Oversight is reporting that U.S. home prices this year were 5.9 percent higher than they were at this time last year, with the New England states leading the ramp up. On the other side of the balance sheet, it appears to be a good time to buy a house in Hawaii.

The OFHEO's House Price Index tracks the average house price changes in repeat sales or refinancings on the same single-family properties. The index is based on analysis of data obtained from more than 11.9 million repeat transactions over the past 20 years.

In the report issued this week, the office found that on average, prices across the country were 5.9 percent higher in the third quarter of this year than they were in the third quarter of last year. By comparison, the Consumer Price Index of all goods and services is only up about 2 percent over this period last year.

In New England, which the department considers to be Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, prices were up an average of 9.0 percent over the third quarter of 1998, with Massachusetts showing an average price leap of 11.7 percent and New Hampshire just behind at 10.0 percent.

The District of Columbia, however, showed the largest single leap in any jurisdiction with a 13.1 percent increase in single-family homes. Minnesota also was in the top five states, with appreciation of 10.0 percent.

Only Hawaii is currently reporting declining home prices.

According to the OFHEO, Hawaii continues to rank the lowest among states for annual growth, this quarter showing a decline in prices of 4.6 percent.

"Although Hawaii experienced significant declines in 1996 and 1997, house price growth appeared to have reached a plateau in 1998 and early 1999," the report said. "This quarter, however, Hawaii experienced an additional 3.5 percent decline. There are no strong signs of a recovery yet."

California, the nation's most active real estate market, appears to have slowed its growth but price appreciation continues to be above average - showing 7.0 percent increases over the past 12 months.

"California experienced the largest annual appreciation among states in the every quarter during 1998, as well as the first quarter of 1999," the report said. "Given the generally healthy appreciation rate over the past year, it is too early to conclude that housing markets are cooling in California."

In the hindsight category, Michigan was the place to have purchased a house five years ago. According to the OFHEO, home prices there have increased 42.7 percent since 1994 - the highest acceleration in the country. Hawaii, again, is on the other end of the scale - having seen prices slide by 15.1 percent over the past five years.

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Published: December 8, 1999

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