It’s the kind of information that is music to the ears of potential home buyers who have been locked out of the market for a long time — the rate of home price appreciation has officially slowed in most places around the nation.

According to the latest quarterly report released Tuesday by the Office of Federal Housing Enterprise Oversight (OFHEO), the lead foot days on the accelerator are over, and the housing market engine is decelerating at the fastest rate seen since the OFHEO began tracking its Housing Price Index (HPI) in 1975.

Although home prices nationwide were up 10.6 percent for Q2 2006 from the same quarter last year, the average rate of price appreciation has slowed down significantly to 1.17 percent.  The OFHEO breaks down its data a few different ways.

Looking at state appreciation levels on a yearly basis (Q2 2005 – Q2 2006) Arizona had the highest level of home price appreciation at 24.05 percent, while Michigan had the lowest at 1.01 percent. By comparison, looking at the top 20 Metropolitan Statistical Areas (MSAs) the top rate of appreciation was in Bend, Oregon at 36.65 percent over the year. The lowest rate in the bottom 20 MSA list was found in Ann Arbor, Michigan with a rate of -1.28 percent.

For subscribers to RealtyTrac what this means is that the days of speculation and flipping property for a quick profit are probably over in many areas around the country. In the end investors, real estate agents and potential buyers using RealtyTrac as a resource are going to have to stretch their search parameters further to find the good foreclosure properties still out there in the marketplace, or look at a longer time horizon to capitalize on their investments.

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