Home Price Growth Slips to Six-Year Low.

MCLEAN, VA -- Home prices rose 6.1% last year, the lowest rate of annual price appreciation since 1999, according to Freddie Mac's conventional home price index.

That was less than half the national home value appreciation rate posted in 2005. And Freddie Mac expects to see the appreciation rate fall by half again this year. The Freddie Mac numbers are generally consistent with the home price tracking of the Office of Federal Housing Enterprise Oversight, which estimated 2006 appreciation of 5.87%.

Both indices showed the rate of appreciation slowing down toward the end of 2006, with the lowest price gains being posted in the fourth quarter.

The index shows a disparity in appreciation rates by state. Prices actually fell in Michigan last year, according to Freddie Mac. Among metropolitan areas, both Boston and Detroit saw home prices fall.

And seven other states (California, Hawaii, Nebraska, Nevada, North Dakota, Rhode Island and West Virginia) saw values drop in the fourth quarter, though prices remained up on a year-over-year basis.

Moreover, the data suggest that demand was slackening late in the year. In the fourth quarter of 2006, the annualized price appreciation rate was just 4.4%, and the volume of home sales fell 11%, according to Freddie Mac. By contrast, values were still rising at an annualized rate of 8% in the third quarter of last year.

Frank Nothaft, Freddie Mac's chief economist, said in a news release that the ...