More than 100 forecasters said they expect the U.S. home value to end 2013 up an average of 6.7% year-over-year, before slowing over the next five years, the latest Zillow Home Price Expectations Survey found.
While appreciation is expected to remain strong through the remainder of this year, the pace of home value growth is predicted to slow considerably through 2018. Panelists said they expect appreciation rates to slow to roughly 4.3 percent next year, on average, eventually falling to 3.4 percent by 2018.
"The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected," said Zillow Chief Economist Stan Humphries. "Rising mortgage rates, diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation."