Eight of nine regions in the country showed increases in home prices in the second quarter, according to figures compiled by Fannie Mae and Freddie Mac. Nationwide, prices climbed 2.7%.
The only laggard was the East South Central region - Alabama, Kentucky, Mississippi, and Indiana - which had a drop of just under 1% from the level in the quarter a year earlier. For the last 12 months, however, the region has had an annualized gain of 4.7% and sturdy five-year growth of 22.3%.
Nationally, the Pacific region is the only one that is not showing price gains in the latest 12 months. But it had growth of 1% in the second quarter and is down only 0.9% for the 12 months.
The numbers, prepared jointly by Fannie and Freddie, are considered particularly accurate because they reflect changes in the actual sales prices or appraised values of the same homes. Other indexes can be distorted by the kinds of homes that are in demand.
Especially significant was an annualized gain of 8.6% in New England. The upward move means prices in the region are now unchanged for the latest 12 months.
In a separate announcement, Freddie Mac, formally the Federal Home Loan Mortgage Corp., said demand for 15-year fixed-rate mortgages has soared among homeowners seeking to refinance.
Freddie's latest survey found that 58% of borrowers with 15-year loans chose to refinance with 15-year loans in the second quarter, up from 39% in the first quarter.
Among those with one-year adjustables, 15% chose 15-year fixed loans for refinancing. Homeowners with five-year balloons switched to 15-year fixed 22% of the time.
"Lower interest rates produced a higher portion of interest-rate- motivated refinancings in the second quarter," said Vassilis Lekkas, a senior economist at Freddie Mac. "Borrowers are choosing to lower their payments or build equity more quickly rather than take equity out of their home, and in such an environment, more borrowers prefer the 15-year product."
Despite the surge for 15-year loans, 30-year loans continued to be the refinancing product of choice for most borrowers, according to a Freddie Mac announcement. This was especially true of borrowers who already hold 30-year loans, who refinanced into new 30-year loans 70% of the time.
Freddie said just 25% of borrowers with adjustable-rate mortgages refinanced into adjustables.