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Home prices continue to surge

The second quarter increase is 13.4 percent nationally, the highest in a quarter-century, with no end in sight.

WASHINGTON - Average U.S. home prices jumped 13.4 percent in the second quarter from a year ago, the biggest increase for a comparable period in more than a quarter-century, federal regulators reported Thursday.

The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees mortgage-finance giants Fannie Mae and Freddie Mac, were the latest affirmation of the housing boom that has pushed home sales to record highs as prices have surged.

"There is no evidence here of prices topping out," the agency's chief economist, Patrick Lawler, said in a statement. "On the contrary, house-price inflation continues to accelerate, as some areas that have experienced relatively slow (price) appreciation are picking up steam."

Average home prices rose 13.4 percent on an annualized basis in the April-June period from the second quarter of 2004, the largest four-quarter increase since the second quarter of 1979, the new report showed.

The figure is derived from an average of prices in April, May and June.

Prices gained 3.2 percent in the latest April-June period for an annual rate of 12.8 percent.

Home prices continued to grow the fastest in the Pacific region and the slowest in the area that includes Texas, Oklahoma, Arkansas and Louisiana, according to the report.

Prices in Arizona and Nevada continue to show "striking appreciation rates," the report said.

New home sales in July soared to a seasonally adjusted annual rate of 1.41-million units, according to the Commerce Department. That represented a 6.5 percent increase from June's pace of 1.32-million units, which had been the previous record.

Federal Reserve chairman Alan Greenspan has recently issued warnings about the sizzling housing market, saying that home prices may fall, slowing consumer spending - a chief ingredient for the economy's robust health.

Greenspan also has voiced concern about the potential perils of risky interest-only mortgages and other exotic types of home loans that have been proliferating.

The OFHEO report, based on data from Fannie Mae and Freddie Mac on repeat sales and refinancings of single-family homes, also found that:

Nevada continues to have the fastest-rising home prices of all states, with prices up 28.1 percent over the past year and 5.5 percent in the second quarter of 2005.

However, for the first time since the fourth quarter of 2003, Las Vegas is not on the agency's list of the 20 metropolitan areas with the fastest-growing home prices.

In Arizona, house prices leapt 9.7 percent in the second quarter, outstripping every other state.

Home prices in 30 of the 265 metropolitan areas rose by more than 25 percent from the second quarter of 2004 to the same period this year.

For the first time, Naples-Marco Island topped the list of metropolitan areas with the highest rates of price increase. Bakersfield, Calif., was second.

Florida, California, Nevada and Arizona are no longer the only states represented in the top 20 metropolitan areas; Idaho and Utah have now entered.

Twenty-five states showed double-digit annual price growth and eight states had price increases of more than 20 percent.

[Last modified September 2, 2005, 02:15:35]