Housing Market Reaching Equilibrium

It’s no secret that the housing market is slowing down everywhere!! Here’s some info that is pertaining to an over all forecast.

Home prices have already begun moderating over the past year and appreciation likely will continue to gradually slow over the next two years, according to a forecast of 31 analysts recently surveyed by Reuters. Analysts predict home prices to rise 7.5 percent this year and then curtail to 4 percent by 2016.

That marks a sharp slowdown from the double-digit increases reported last year. Analysts surveyed by Reuters say they expect prices to slow in the coming months due to tight lending standards, slow wage growth, and a lack of first-time buyers.

“Growth would be more robust if we saw more first-time homebuyers in the market,” says David Nice, economist at Mesirow Financial. “That would put the housing market on a sustainable growth trajectory.”

Analysts surveyed expect existing home sales to reach a 4.75 million annual rate in the second quarter of this year and rise to 5.10 million in the first quarter of 2015.

“We are seeing a state of equilibrium,” says Mark Goldman, a real estate expert at San Diego State University in California. “I don’t see any symptoms that would cause housing prices to go up or down significantly.”

Source: “U.S. House Price Gains Seen Moderating Over Next Few Years: Poll,” Reuters (May 30, 2014)