U.S. home prices on the low-to-middle end of the market increased 0.1% in the second quarter of 2007 according to the OFHEO House Price Index (HPI), down from 0.6% in the first quarter and the lowest rate since the fourth quarter of 1994. Still, prices for homes selling for under $417,000 were up 3.2% from the second quarter of 2006, but even that was the lowest annual price change since the 1996-97 period.

OFHEO's purchase-only index, based solely on purchase price data, indicates less appreciation for U.S. houses over the past year than does the all transactions HPI. The purchase-only index increased 2.6% between the second quarter of 2006 and the second quarter of 2007, compared with 3.2% for the HPI. However, for the second quarter, the purchase-only index increase was slightly higher at 0.5% (seasonally-adjusted).

"House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment," said OFHEO Director James B. Lockhart. "Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom."

Regionally, the West South Central and Mountain Census Divisions continue to have the strongest housing markets, with appreciation over the past four quarters coming in at 6.3% for the West South Central Division (5.6% for the purchase-only index), which includes Texas, Oklahoma, Arkansas, and Louisiana. The appreciation in the Mountain Division was 6.1 percent (6.7% using the purchase-only metric).

New England remains the softest region, with prices up 0.5% there between the second quarter of 2006 and the second quarter of 2007. The states with the greatest appreciation between the second quarter of 2006 and the second quarter of 2007 were: Utah (15.3%), Wyoming (12.8%), Washington (9.1%), Montana (9.1%), and New Mexico (8.8%). The states with price declines for the same period were: Nevada (-1.5%), Michigan (-1.4%), California (-1.4%), Massachusetts (-1.0%), and Rhode Island (-1.0%).

The Metropolitan Statistical Areas (MSAs) with the greatest appreciation between the second quarter of 2006 and the second quarter of 2007 were: Wenatchee, Washington (23.5%), Provo-Orem, Utah (18.2%), and Salt Lake City, Utah (16.0%). The MSAs with the largest price declines for the same period were all in California: Merced, California (-8.7%), Santa Barbara-Santa Maria-Goleta, California (-8.1%), and Stockton, California (-7.2%). Eighteen of the 20 cities having the lowest four-quarter appreciation rates were in Florida and California. Those cities experienced price declines of between 4.2 and 8.7%.

"These newest data show price declines in many areas that were once at the center of the housing boom," said OFHEO Chief Economist Patrick Lawler. "Nevertheless, in most states, prices held their ground or increased slightly."

State-by-state rankings follow:

State Rank* 1-Yr. Qtr. 5-Yr. Since 1980

Utah 1 15.28 2.66 52.95 282.80

Wyoming 2 12.84 2.98 64.33 180.34

Washington 3 9.12 1.48 67.68 409.23

Montana 4 9.06 0.92 62.17 286.70

New Mexico 5 8.81 1.37 57.04 239.62

Idaho 6 8.42 0.96 64.43 249.08

Oregon 7 8.18 1.64 70.91 367.55

North Carolina 8 7.10 0.77 32.72 239.43

Texas 9 6.94 1.82 26.66 125.54

Mississippi 10 6.73 0.12 33.19 159.84

Tennessee 11 6.61 1.46 32.95 213.36

Louisiana 12 6.60 0.94 41.86 148.83

North Dakota 13 6.57 1.83 42.21 155.61

Alabama 14 6.57 1.53 34.64 192.88

South Carolina 15 6.27 0.16 34.90 222.28

Alaska 16 5.98 1.39 52.25 183.20

South Dakota 17 5.34 0.97 31.84 189.74

Arkansas 18 4.94 1.12 34.08 161.82

Delaware 19 4.93 1.34 66.39 419.88

Kansas 20 4.75 1.54 23.85 147.87

Maryland 21 4.72 0.83 91.87 447.40

Pennsylvania 22 4.71 0.67 52.78 311.80

Georgia 23 4.67 0.50 27.76 238.36

D.C. 24 4.62 0.03 100.79 565.34

Hawaii 25 4.53 1.01 106.43 454.21

West Virginia 26 4.38 -0.23 35.27 132.47

Oklahoma 27 4.31 0.21 26.89 104.56

Missouri 28 4.13 0.64 30.63 206.55

Iowa 29 3.94 1.25 23.63 154.42

Kentucky 30 3.94 0.58 24.55 191.82

Illinois 31 3.77 0.28 39.17 284.14

Virginia 32 3.70 0.71 74.54 377.60

Vermont 33 3.67 -0.57 58.99 365.09

Maine 34 3.54 -0.16 51.37 421.12

Wisconsin 35 3.38 0.24 33.00 234.60

Indiana 36 2.98 0.28 16.51 160.00

Colorado 37 2.95 0.65 20.21 268.64

Nebraska 38 2.67 0.79 20.45 160.29

Arizona 39 2.20 -0.29 90.78 329.96

New York 40 2.09 -0.55 58.76 563.74

New Jersey 41 1.91 -0.35 67.54 482.40

Connecticut 42 1.84 -0.81 50.59 378.79

Minnesota 43 1.78 -0.53 35.68 273.19

New Hampshire 44 1.49 0.45 44.65 408.23

Florida 45 1.29 -0.75 95.30 385.08

Ohio 46 0.69 -0.31 14.41 170.97

Rhode Island 47 -0.97 -1.74 64.96 495.82

Massachusetts 48 -0.99 -1.09 36.61 617.18

California 49 -1.38 -1.21 90.15 536.32

Michigan 50 -1.42 -1.43 10.91 214.90

Nevada 51 -1.45 -1.62 89.47 302.60