Forget the West. If you want to make money in housing, buy and sell in New England.

According to the latest federal government statistics, prices rose faster in Massachusetts last year than any other state in the country. And New Hampshire was fourth.

Better yet, they were two of only four states which experienced double-digit inflation in 1999. Sandwiched in between were Minnesota and Colorado.

Prices increased an average of 12.6 percent in Massachusetts last year, on top of a 7.8 percent gain in 1998 and pretty near double the national average increase of 6.4 percent. And this doesn't even include new houses, which tend to lead the market in terms of price hikes. Or expensive houses that cost more than $252,700.

Minnesota saw its average price climb 11.3 percent, followed by Colorado, up 11.2 percent; New Hampshire, up 10.4 percent, and Michigan, up 9.1 percent.

The figures come from the Office of Federal Housing Enterprise Oversight and measure price changes in repeat sales or refinancings on the same single-family houses financed by loans touched in some way by Fannie Mae and Freddie Mac, the nation's two largest housing finance institutions.

OFHEO is the independent agency within the Department of Housing and Urban Development that regulates Fannie and Freddie, government-chartered enterprises that are charged with generating a continual supply of mortgage money for local lenders and their customers. Together, they buy more than half of all mortgages for their own portfolios or pooling into securities for sale to investors throughout the world.

Actually, last year's top five performers should come as no surprise. For the most part, they have been the states with the best price appreciation during the last five years.

What is surprising, though, is that several of the fastest growing Mountain states turned in rather poor results. The average price was up just 1.2 percent in both Idaho and Nevada, and only 2 percent in Utah.

Regionally, the Pacific division (Alaska, California, Hawaii, Oregon and Washington) was the only one to experience notably slower growth in 1999 than in '98, 6 percent vs. 8 percent. But it didn't do as badly as the East South Central division (Alabama, Kentucky, Mississippi and Tennessee), which had the slowest rate of appreciation, just 4.5 percent.

Since 1995, however, every region has done well. Only the Middle Atlanta states (New York, Pennsylvania, New Jersey) didn't register an average increase of greater than 20 percent. But at 18.8 percent, it was close.

For the country as a whole, the average increased 26.1 percent during the five-year period. But the West North Central region (North and South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri) did best at 31.4 percent.

OFHEO's house price index is published quarterly.

Published: March 15, 2000

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