The Office of Federal Housing Enterprise Oversight released their 1Q 2006 OFHEO House Price Index Report on Thursday [pdf] with much anticipation and fan fare. I discussed my issues with the report as a reliable statistical tool in a prior post. Remember, this data is circa November 2005 – January 2006. It is now June 2006 and the FOMC is ready for another meeting to decide rates.

The PR efforts that go into this report appear overly optimistic in their spin, along the lines of the releases by NAR each month. The premise and emphasis is on the change over the prior year. That does not give the proper impression of the current market to readers. In addition, the appreciation rate is boosted about 2.5% with the addition of refinance data (note: this is not sales data of the subject property used in the repeat sales analysis of the study).

• U.S. home prices were 12.54 percent higher in the first quarter of 2006 than they were one year earlier. Its a 10.04% increase if you exclude refi data.

• Appreciation for the most recent quarter was 2.03 percent, or an annualized rate of 8.12 percent, the lowest rate since the first quarter of 2004. The lowest since 2004? Thats barely more than a year ago – why is this important?

I am thinking, here’s yet another market study that does not correlate to current market conditions. More confusion for the masses.