Home Price Gains Looking to Slow
Home price gains arelooking to slow according to a recent study that examined the health of the national housing industry. Data compiled from nearly 400 metropolitan areas, which comprises more than 80% of the United States housing market, suggests that the double digit price increases are expected to slack by upwards of 6.5% by the end of March 2014.
The study, derived from data supplied by CoreLogic Case-Shiller indicates that home prices had jumped more than 12% from July 2012 and July 2013. Several factors have fueled that impressive growth including record affordability, an improving job market, and comparatively small inventories of new and existing homes on the market. Some areas are certainly doing better than others, however.
The study highlights those five states that have seen the most impressive growth in housing prices over the previous 12 months and include: Nevada (27% increase), California (23.2% increase), Arizona (17% increase), Wyoming (16.4% increase) and Oregon (15% increase).
However, home price gainsare looking to slow during the second half of the year, according to the data. Dr. David Stiff, chief economist for CoreLogic, cites historical seasonal demand levels, which finds most people nesting during the holidays as opposed to house hunting, and rising mortgage rates as the leading causes for the temporary damper on the housing recovery.
Despite the anticipated slowing, Stiff and others are confident that the housing recovery has resiliency. He notes that in those areas where prices have taken a southward trajectory, he anticipates that they will reverse direction by the year’s end. Additionally, short shrift was paid to the idea that the nation was headed for yet another housing bubble in the face of impressive housing gains.
“Housing prices remain 26% below their peak nationally and are even lower in some metro areas,” said Stiff in dismissing the fear.
