U.S. Home Prices Cooling Off

U.S. house prices soared more than 12.5% on average over the past year, but slower gains in the first quarter of 2006, combined with declines in some states, point to weakness in the market, a government report showed Thursday.

While prices continued to march higher in many areas, they declined in some states in the first quarter for the first time in more than three years, the report said.

"These data show average housing prices still growing stronger than some might have expected," said James Lockhart, acting director of the Office of Federal Housing Enterprise Oversight. "They do indicate, however, that price growth is moderating in some parts of the country, particularly in areas where prices have been rising the most."

Prices rose 2.0% in the USA during the first quarter of 2006 — for an annualized rate of 8.12%. That quarterly rate is the lowest since the first quarter of 2004, according to OFHEO.

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