Economists Revise Home Value Forecasts

first_img August 9, 2013 429 Views Economists Revise Home Value Forecasts Agents & Brokers Attorneys & Title Companies Home Prices Home Values Investors Lenders & Servicers Mortgage Rates Processing Service Providers Zillow 2013-08-09 Tory Barringer Home values are on track to reach more than $167,000 by the end of 2013, according to economists and real estate experts surveyed by “”Zillow””: and “”Pulsenomics””:[IMAGE]According to Zillow, respondents predicted median home values will rise to $167,490 by the end of this year, a gain of 6.7 percent over 2012. The forecast is a significant jump from the 5.4 percent annual increase expected in the last quarterly survey.Based on current expectations for home value appreciation over the next five years, panelists on average predicted home values could approach new record highs by the end of 2017.That said, many predicted appreciation rates will slow from 2014 through 2017. According to Zillow, survey respondents said they expect appreciation rates to slow to roughly 4.4 percent in 2014, slipping gradually each year to a rate of 3.4 percent in 2017. [COLUMN_BREAK] Cumulatively, home values are project to rise approximately 23.7 percent over the next four years.””Short-term expectations for home value appreciation through the end of this year are consistent with a nationwide housing market recovery that is both strengthening and widening, but still coping with high levels of negative equity, high demand and low inventory. Combined, these factors will continue putting upward pressure on home values for the next few months,”” said Zillow senior economist Dr. Svenja Gudell.However, Gudell continued, “”the days are numbered for these kinds of market dynamics, as investors begin to pull out of some markets, mortgage interest rates rise and more inventory becomes available.””On the subject of interest rates, many respondents weren’t especially concerned, even with rates posting the largest three-month gain since 2003. Among those who expressed an opinion, 88 percent said they don’t think the current rate environment poses a threat to the housing market recovery; of that group, 61 percent said interest rates would have to rise to at least 6 percent to create a significant threat.””Six percent is the minimum mortgage rate threshold that the most number of panelists view as a potential show-stopper for the recovery,”” said Pulsenomics founder Terry Loebs. “”However, nobody should dismiss the implications for the housing market of the less popular view–held by 38 percent of our experts–that we are already flirting with a reversal of fortunes at or within about 100 basis points of prevailing mortgage rate levels.””center_img Share in Data, Government, Origination, Secondary Market, Servicinglast_img read more