US house prices increase but slowly

US house prices increase but slowly

WASHINGTON - The average price of a home in the US increased by 12 percent over the 12 months ending September 30, but this increase was of a slow nature particularly in some markets that are usually considered property hot-spots, according to the Office of Federal Housing Enterprise Oversight.

This increase up to September was on the positive side, but was less than the 14.2 percent increase registered in the 12 months ending June 30. There was a 2.9 percent increase in the average prices in the third quarter as compared to the prices in the second quarter. However, this did not compare favorably with the 3.4 percent gain at the same time last year.

"Appreciation rates in the third quarter were extremely strong, although some deceleration can be seen in a number of the faster-appreciating markets," Patrick Lawler, the chief economist at the OFHEO suggested in a report. This report comes close on the heels of predictions of a slowdown in the housing market. The market is expected to remain cool well into the next year. This situation could have an adverse impact on the economy as well as the job market.

It was found that Arizona topped the list of property prices with a 30.3 percent gain over the last 12 months. Florida, with a 25.2 percent gain was next on the list. All states registered increases in prices, with Michigan coming in at the bottom with a 4 percent increase.

When compared over the last five years, the District of Columbia had the best record with a 119 percent growth. The rate of growth in the third quarter of the year in DC was 20.5 percent. Prices in Nevada slipped from 28.6 percent to 17.6 percent. "Much of the recent run-up in mortgage rates occurred after the third quarter ended. To the extent that those increases may have affected prices, those effects will be evident in future quarters," said Lawler adding that the rising interest rates may further impact the market.

Sales of existing homes in the US dipped by 7 percent in October, but sales of new homes jumped by 13 percent in the same period.