Is there a mistake in the 4Q 2005 OFHEO?
In the 4Q 2005 Report: "Average U.S. home prices increased 12.95 percent from the fourth quarter of 2004 through the fourth quarter of 2005. Appreciation for the most recent quarter was 2.86 percent, or an annualized rate of 11.4 percent."
In the 3Q 2005 Report: "Average U.S. home prices increased 12.02 percent year over year from the third quarter of 2004 through the third quarter of 2005. This represents a two percentage point decline from the previous four-quarter appreciation rate of approximately 14
percent. Appreciation for the most recent quarter was 2.86 percent."
Also look at page 15 in both of the reports.
The price appreciation for the most recent quarter was the same exact rate (2.86) as 3Q 2005. What is the chances that it will be exactly the same considering there are two decimal digits? Perhaps it is a mistake?
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Check my ip when I say this David... OFEO only looks at data from Fannie Mae and Freddie Mac, which by law can't give a loan over $397k. As such the report tells you about the bottom of the of the market and nothing about the top. Furthermore the loan limit means that most sales in this area are excluded from the report.
ReplyDeleteFurthermore the loan limit means that most sales in this area are excluded from the report.
ReplyDeleteThat's not what OFHEO says. They say that their data include a lot of expensive houses on the coasts because of the way buyers structure their home loans. A lot of buyers get a primary mortgage up to the conforming limit, and then a piggyback loan for the remainder. Those houses end up in the OFHEO database.
Also, a lot of people trade up or trade laterally, and are able to get conforming mortgages, even with very expensive houses. These transactions end up in the OFHEO database.