by Calculated Risk on 5/28/2006 04:49:00 PM

The Q1 OFHEO House Price Index will be released on Thursday, 10 A.M. EST. The headline number is the year over year price increase - and that will still be positive.

However, I expect the US and many Metropolitan Statistical Area's (MSA) might see negative Q1 appreciation declining prices. Those will be the interesting numbers.

Here are the last 3 quarters:

2005 Q2 3.65%
2005 Q3 3.14%
2005 Q4 2.86%

So even if Q1 2006 shows negative appreciation declining prices, the headline number will be solidly positive.

Click on graph for larger image.

"We've never had a decline in housing prices on a nationwide basis."
Ben Bernanke, July 29, 2005

The US hasn't seen negative declining annual home prices appreciation since the Depression, however nationwide annual appreciation was close to zero in the early '90s. There have been several quarters of negative appreciation declining prices, the worst being Q4 1990 when US housing prices declined 0.47% (1.9% annualized). If prices decline more than 0.47% for Q1 2006, than Q1 will be the worst quarter in OFHEO's HPI history.