Home Price Appreciation Has Peaked -Poll

In a poll of 31 property analysts Reutersrnnews agency found consensus that the growth of house prices in the U.S. hasrnpeaked and that further increases over the next two years will be morernrestrained.  The analysts’ predictionsrncentered on a median 7.5 percent increase this year and a gain of only 4.0rnpercent by 2016.</p

Reuters says this is a significantrnslowdown from the 12.4 percent jump in home values over the 12 months ended inrnMarch that was recently reported by the S&P/Case Shiller 20-City CompositernIndex.   The rate of increase has recentlyrnslowed from that which occurred in the earlier months of that timeline.   </p

(Read More: Three Data Sets Concur on Continuing but Slower Price Increases)</p

The analysts agreed that further pricernincreases will likely be curbed by tight lending standards, slow wage growth,rnand a lack of first-time buyers, a group that might be further restrained byrnthose factors.   </p

Results of the poll also included arnconsensus that home resales would reach a 4.75 million annual rate in thernsecond quarter of 2014 and would continue that upward trajectory, reaching 5.10rnmillion sales by the first quarter of next year.  Resales were at an annual rate of 4.65 inrnApril.</p

Among the questions the poll put tornrespondents was whether the U.S. housing market was fairly valued.  On a scale of one to 10, ranging fromrnextremely undervalued (one) to extremely overvalued responses were termed byrnReuters as fairly conservative, ranging between 3 and 7.5. </p

Reuters said the housing market lost some of its momentum in late 2013 andrnearly 2014 as mortgage rates rose and unusually cold weather caused the economyrnto contract by an annual rate of 1 percent in the first quarter and residentialrninvestment to drop by an annual rate of 5 percent. </p

Reuters said that more first-timernhomebuyers would mean more robust growth but that much would also depend onrninterest rates.  Currently the averagern30-year fixed rate is a little over 4 percent and is expected to rise to 4.5rnpercent this year and to 5.68 percent in 2016.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.