Realtors expect home prices to continue to appreciate over the next year, with a median price increase expected of 4% over the next 12 months, according to the latest survey of the National Association of Realtors in their confidence index.
The index reflects the responses of more than 3,000 NAR members about their sales transactions.
The full report can be read here.
“Slower sales due to tight credit conditions, declining affordability due to the recent price growth amid modest income gains, and fewer distressed sales likely account for the modest expectations,” economists note in the report.
Some states are slightly more optimistic about home price increases, such as in Florida, where low housing inventories and high demand are expected to boost prices.
Price growth in Florida is expected in the range of 5% to 7% over the next 12 months.
Real estate professionals in states including California, Oregon, Nevada, Texas, and Georgia are forecasting home prices to be greater than 5% to 6% in the next 12 months.
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“The median price for a new home under contract jumped 12.6% over the 12-month period ending in March to $290,000. The median existing home price was 31.7% lower at $198,200, more than three times the historical average spread of 10.8%, suggesting that existing homes are a bargain by historical standards,” said Ken Fears, director of regional economics and housing policy at NAR. “It appears that new home sales have begun to feel the weight of the sharp increase in mortgage rates, home price gains, and the erosion of affordability over the last 12 months. The impact of weather on new production will ease through the summer, resulting in additional inventory coming on line in six to nine months. However, inventory remains tight and prices continue to rise. A moderate increase in inventory will help to steady prices to a historically stable growth path.”
In most states, agents are predicting a 3% to 5% growth in home prices.