Slowest Rate: House Prices In 2007

Freddie Mac, the second-largest U.S. home funding company said house prices rose in the Q1 of 2007 at the slowest annual rate in 14 years. Home prices did not keep pace with inflation during the quarter. As the housing market settles near the bottom of its cycle during the second half of this year, national home price growth will probably slow further, with price declines in many parts of the country. Existing home sales rose in Q1 2007 compared to Q4 2006, but were down more than 9% from a year ago. Home prices rose 1.3% in Q1 on an annualized basis and 2.8% year over year, which was its slowest annual rate of growth since the Q1 1993, when prices increased by 1.6%.

Pending sales of existing U.S. homes in April unexpectedly fell to its lowest since February 2003. The April Pending Home Sales Index fell 3.2% to 101.4 from an upwardly revised level of 104.8 in March. The index registered 99.3 in February 2003. Analysts were expecting the April index to be 105. Higher foreclosures and bad subprime lending industry lead to dampen home sales market.