WASHINGTON -- The latest federal figures suggest red-hot home prices may be cooling a bit.

Figures from the Office of Federal Housing Enterprise Oversight show average prices rose a little more than 12 percent from third quarter 2004 to the same period this year.

The July-to-September price gains are down from the 13.4 percent yearly gain for the second quarter.

The agency oversees the mortgage-finance companies Fannie Mae and Freddie Mac.

The office's top economist said the home price increases were very strong, but Patrick Lawler said there were signs of slowing in some of the hottest markets.

"Appreciation rates in the third quarter were extremely strong, although some deceleration can be seen in a number of the faster-appreciating markets,” said Lawler.

The Pacific and New England states showed the biggest slowing.

Other findings from the House Price Index included:

• Price growth in Arizona continues to accelerate, with a one-year appreciation rate of 30 percent, the largest of any state by a wide margin.
• Florida became the second fastest-appreciating state, with four-quarter appreciation of 25 percent and 11 of the 20 highest ranked metropolitan areas.
• Nevada’s four-quarter appreciation rate declined by more than 10 percent from the previous rate of 28.6 to 17.6 percent.
• Two states that continue to show noticeable house price appreciation are Idaho and Utah. Idaho, with an appreciation rate of 15.1 percent on a four-quarter basis, is now ranked 12 among states, up from 20 in the previous HPI report. With annual price growth of 11.4 percent, Utah’s ranking jumped to 22, compared with 31 in the previous HPI report and last place in the fourth quarter of 2003.
• With a four-quarter appreciation rate of 34.4 percent, Phoenix-Mesa-Scottsdale, Ariz., topped the list of the fastest appreciating areas for the first time since the Office of Federal Housing Enterprise Oversight began publishing its index in the fourth quarter of 1995. Last quarter’s top area, Naples- Marco Island, Fla., dropped to No. 3.
• For the first time since the fourth quarter of 2003, the list of the Top 20 metropolitan areas having the highest appreciation does not contain any Nevada cities. Reno-Sparks, Nev., the fourth-ranked market last quarter, is now 29 among the 265 ranked metropolitan areas. Also, Las Vegas-Paradise, Nev., has fallen from 21 to 77, with four-quarter appreciation of 13.77 percent.

To read a PDF version of the House Price Index, click here.