Home prices nationwide are going into the second quarter on solid ground and are expected to remain positive throughout the year, according to data from Clear Capital.
For the nation, the three-quarter forecast is 1.7%, which would bring home price growth for the entire total year to 2.6%.
Compared to January’s one-year forecast, growth is anticipated to be even stronger, due partly to the solid winter season in which home prices stayed positive over the winter for the first time since 2006.
“It has been seven years since home price growth continued throughout winter. This is very strong evidence of the start to a new leg of the recovery, one that should give further confidence to consumers and lenders alike that the recovery is real,” said Alex Villacorta, director of research and analytics at Clear Capital.
Villacorta notes that as buyers become more confident the recovery is sustainable, this sentiment should grow to create a positive feedback loop.
Broken down, the Northeast is expected to see the largest gain in home prices over the next three quarters with a 2.1% jump. The Midwest, South and West are expected to see gains of 1.9%, 1.8% and 0.7%, respectively.
According to Clear Capital, this year should experience a balance in growth across the regions, with the hardest-hit markets seeing buyer interest cool due to price appreciation. Conversely, more fair market sellers may help boost supply.
While regional trends do indicate national trends, the Clear Capital report analyzes market-by-market behavior. Major metro markets are likely to continue seeing noteworthy variability in price trends over the next three quarters, according to the report.
Over the next 9 months, Seattle is expected to see 6.9% growth, indicating healthy fundamentals overall. On the other hand, Phoenix is predicted to cool off substantially over the next nine months after staying hot for so long.
“Phoenix is a great example where we expect to see that cooling trend support a more sustainable recovery. After a strong year of growth, rising prices should bring the metro back into a more normal range of growth,” said Villacorta.
He added, “In addition, the typical influx of spring and summer supply will also help subdue price gains. All in all, this is great news for housing, where prices are sustainably on the rise, demand continues to grow, and the expected supply influx should curtail any bubble-like price trend behavior.”