Nationally, homes continue to appreciate but at a slow pace.

Single-family house prices during the fourth quarter of 2006 were up 4.1 percent from the prior year period, when adjusted for the influence of refinance activity, according to the Office of Federal Housing Enterprise Oversight (OFHEO). The fourth quarter advance, however, was at a meager 1.8 percent pace. That follows on the heels of a 1.6 percent rate of gain during the third quarter and marks the first quarterly acceleration since the second quarter of 2005. The pick-up is so small, however, we are disinclined to call this a turning point.

global insight house prices

Nevertheless, according to National City’s methodology, many metro areas are significantly overvalued.

This quarterly study, as always, is a must-read.

Under-valued u.s. Markets

Texas is the center of the undervalued markets according to National City. To find information on investing in residential real estate in Texas or anywhere in the United States, the National Assocation of Residential Real Estate Investment Advisors website is an excellent resource, although registration is required.

Note: Global Insight doesn’t provide the report online anymore. You have to sign up and they email you the report.