Although I value many of the social aspects of owning, in addition to the economic sense, this latest study shows home appreciation remains strong. I am a strong believer any couple paying over $1000/month in rent plus utilities, should own a place here in Chicago. Just choose the right place for you... with my help.
Monday, March 06, 2006
House-price appreciation continued at a robust pace at the end of 2005, with average home prices increasing 12.95 percent from the fourth quarter 2004 through the fourth quarter 2005, according to the Office of Federal Housing Enterprise Oversight.
Appreciation for the most recent quarter was 2.86 percent, or an annualized rate of 11.4 percent, according to OFHEO's figures released last week. The increase during 2005 is similar to the revised increase of 12.55 percent for the year ended with the third quarter of 2005, showing no evidence of a slowdown in average prices.
"Despite recent indications that a slowdown may be forthcoming, house-price appreciation during 2005 continued to hover at near-record levels," said OFHEO Chief Economist Patrick Lawler.
House prices continued to grow considerably faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index. House prices rose 12.95 percent, while prices of other goods and services rose only 4.3 percent.
"While deceleration continues in some areas, appreciation generally is still extremely strong," said Lawler. "Mortgage rates climbed significantly during the second half of last year, but the effect of that increase on price appreciation so far appears to be limited."
OFHEO's index is based on analysis of data obtained from Fannie Mae and Freddie Mac from more than 31.2 million repeat transactions over the past 31 years. OFHEO analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation's largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased in 2005 was $359,650. The limit for 2006 is $417,000
Source: Inman News and Chicago Association of Realtors