(Bloomberg) -- Sept. 5, 2006 -- U.S. home-price growth slowed during the second quarter from a year earlier in the sharpest three-month plunge on record, according to a government report issued today that indicates this year's housing slump is deepening.
``The wheels are coming off the housing market,'' said Scott Anderson, an economist at Wells Fargo & Co. in Minneapolis.
Prices for single-family homes rose an average of 1.17 percent during the quarter, compared with 3.65 percent growth in the second quarter of 2005, according to a report issued today by Office of Federal Housing Enterprise in Washington. The drop was the biggest since the agency began keeping records in 1975. The report doesn't give an average price, only the percent of change.
The quarterly slowdown came during the ``spring selling season,'' when about half of a year's home sales typically occur, suggesting the housing market may be slowing more rapidly than economists including Anderson initially predicted. In 2005, the last of five record-breaking years for U.S. home sales and price gains, the second quarter was the strongest, according to Ofheo data.
``The housing market is cooling in a very significant way,'' Ofheo Director James Lockhart said in today's report.
U.S. sales of existing houses and condominiums declined to 6.69 million at a seasonally adjusted annual rate in the second quarter from 7.19 million a year earlier, the National Association of Realtors said on Aug. 15. The median price for a condominium dropped 0.3 percent to $225,800 from a year ago, the first decline on record, while the median for a single-family home rose 3.7 percent to $227,500, the slowest pace in six years.