Strong Price Growth Leaves Some Expecting a Cool Down.(Federal Home Loan Mortgage Corp.)

Washington -- Freddie Mac expects to see price declines in some hot housing markets, according to the company's president and chief executive Richard Syron.

"Along with many other informed observers, we do anticipate some cooling in the hotter markets. And indeed, we are prepared to see some retracing in house prices in some of these markets where gains, quite frankly, outpaced the underlying economic drivers," he said.

However, the government-sponsored enterprise does not expect housing prices will decline substantially on a national basis," he added.

Mr. Syron made his remarks during a conference call with investors and Wall Street analysts last week.

Separately, the Office of Federal Housing Enterprise Oversight reported that housing prices jumped in the second quarter, which sent the annual rate of price appreciation up to 13.4% - the largest increase in over 25 years.

Using Fannie Mae and Freddie Mac data on repeat home sales and refinancings, OFHEO reported that prices rose 3.2% in the second quarter, up from 2.55% in the prior quarter.

"There is no evidence here of prices topping out," said OFHEO chief economist Patrick Lawler. "On the contrary, house price inflation continues to accelerate, as some areas that have experienced relatively slow appreciation are picking up steam."