House Values Inch Up for Landlords
Compared with a 7.7-percent rate in the third quarter of last year, home values rose a 1.3-percent annual rate on average in the fourth quarter. This figure was according to Freddie Mac’s Conventional Mortgage Home Price Index, which is based on sales and mortgage refinancings. It was the slowest rate of growth since the fourth quarter of 1994, when values fell slightly. Frank Nothaft, chief economist for Freddie Mac, says it was no surprise that home price growth slowed to a crawl in the fourth quarter despite brisk sales and record refinancing activity driven by the lowest mortgage rates in 33 years.
“Whenever we have had an economic recession in the past we have seen a dramatic slowing in house price growth. A second contributing factor was the hard events of Sept. 11, which certainly jolted the economy and probably had some effect on the housing market in terms of uncertainty about the future.” Nothaft said.
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