Q1 Home-Price Growth Marks Slowest Pace in 10 Years

The rate of increase in U.S. home prices remained slow in the first quarter of the year, marking the slowest growth pace in a decade and extending a trend that began last year.

Figures released Thursday by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac, provided the latest indication of a modulated slowdown in the once-sizzling housing market.

Average home prices edged up 0.5 percent in the January-March period, compared with 2.2 percent in the first quarter of 2006, the report showed. House prices were 4.3 percent higher in the first quarter of this year than they were in the same quarter of 2006.

"Nationwide, house prices continued to rise in the first quarter of 2007, albeit at the lowest rate in 10 years," OFHEO Director James B. Lockhart said in a statement.

Home prices still grew faster over the past year than prices of other goods and services reflected in the Consumer Price Index, which rose 1.6 percent, the agency said. Low interest and unemployment rates continued to buttress house prices in most areas of the country, it said.

But two states, Massachusetts and Michigan, had home-price declines over four consecutive quarters — the first time in seven years that occurred, according to OFHEO.

The first-quarter figure is derived from an average of home prices in January, February and March.

A housing index released Tuesday by credit-rating agency Standard & Poor's showed U.S. home prices falling 1.4 percent in the first quarter compared with a year earlier, the first time since 1991 that prices marked a quarterly decline.