Year-over-year home price appreciation was up nearly 5.9 percent at the end of last year nationwide, but that's the lowest level since 2003, according to a lagging indicator that doesn't accurately mirror today's real estate market.

Data recently released from the Office of Federal Enterprise Oversight's Home Price Index for the fourth quarter 2006 reveals of the 282 cities on OFHEO's list of "ranked" Metropolitan Statistical Areas (MSAs), 256 had positive fourth-quarter appreciation, 25 had declines and one had an unchanged rate of appreciation.

The data, already two months old, does, however, reveal some trends.

"These data show that, on the whole, prices are still rising, albeit at a much slower pace," said OFHEO director James B. Lockhart.

"This suggests that house price appreciation is, for now, more in line with historical norms," he added.

Overall, other than a quarterly appreciation rate of 1.03 percent during the third quarter last year, the fourth quarter's 1.2 percent rate hasn't been that low since it hit the same mark in the fourth quarter of 1999. Again, other than the third quarter last year, when the annualized quarterly rate of appreciation was 4.11 percent, the fourth quarter's annualized rate of 4.47 percent in 2006 hasn't been that low also since the fourth quarter 1999 when it was 4.49 percent.

The 5.87 percent year-over-year rate of appreciation compares to 5.98 percent in the third quarter 2003 and 5.11 percent, again, in the fourth quarter 1999, according to OFHEO data.

Geographical trends were also apparent.

States with the greatest rates of appreciation during the fourth quarter, 2005 period to the fourth quarter, 2006 were all northwestern states: Utah (17.6 percent), Wyoming (14.3 percent), Idaho (14.0 percent), Washington (13.7 percent), and Oregon (13.5 percent).

The states with the lowest rates of appreciation were largely Midwestern: Michigan (at -0.4 percent, the only state with average statewide depreciation), Massachusetts (0.5 percent), Ohio (1.0 percent), Indiana (2.3 percent), and Minnesota (2.5 percent).

"Ranked" MSAs with the greatest rates of appreciation were also northeastern locales: Bend, OR (21.4 percent), Wenatchee, WA (20.9 percent), and Provo-Orem, UT (19.9 percent).

At the other end, the Santa Barbara-Santa Maria-Goleta, CA MSA (-4.2 percent) joined Midwestern towns Kokomo, IN (-5.3 percent) and Jackson, MI (-3.9 percent).

In the "unranked" category of towns with smaller sales samples Waco, TX, had the greatest year-over-year decline in prices at a negative 4.05 percent. Only three other cities revealed price declines. Among unranked towns, another Texas city, Midland, yielded the greatest rate of home price appreciation at 25.45 percent -- the highest among all cities ranked and unranked.

Other notable trends included:

• Quarterly appreciation is decelerating fastest in the Pacific Census Division where prices grew only 0.4 percent from the third to fourth quarter.

• Most, 21 of the 26, ranked metros in California revealed negative quarterly appreciation rates.

• Nevada, which had the highest statewide appreciation in the nation two years ago, is now ranked 40th among the states with a fourth-quarter appreciation of only 3.9 percent.

• Thanks to low inventories, seven Hurricane Katrina affected areas revealed double-digit home price appreciation in 2006.

• The Mountain Division came in with higher quarterly and annual appreciation rates than any other census division. Within the region, however, there are wide variations. Quarterly appreciation exceeded 2 percent in Wyoming, Utah, Idaho and New Mexico. Arizona, meanwhile, experienced much lower quarterly appreciation of 1.0 percent. Nevada's prices declined 0.2 percent.

Published: March 8, 2007

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.