Priced to Foreclose
A new report shows a strong correlation between slow home price
appreciation and high foreclosure rates, although it's clear the
correlation does not involve a direct cause-and-effect relationship.
The
Office of Federal Housing Enterprise Oversight (thank goodness for acronyms) on Thursday released
home price appreciation statistics
for the first quarter of 2006, which show that U.S. homes are appreciating at the slowest quarterly rate since the first
quarter of 2004.
The OFHEO report ranks the 50 states and the District of Columbia based
on year-over-year home price appreciation. Many of the states near the
bottom of that list -- namely
Michigan, Ohio, Indiana, Colorado, Texas and
Georgia -- also appeared among the top 10 on
RealtyTrac's list of state foreclosure rates in the first quarter.
While these states show that sluggish home price appreciation and
above-average foreclosure rates are certainly linked in many areas,
other states broke that link. The most glaring example was
Florida, which ranked second in home price
appreciation but documented the 10th highest foreclosure rate. Other
states with similar statistics included
Arizona and
Nevada.
There are certainly other forces at work in every housing market,
influencing both home price appreciation and foreclosure rates. We'd
like to hear what you think is the dominant factor impacting your local housing market. Leave a
comment or e-mail us at
editor@foreclosurepulse.com.