Back in February, housing economists at Zillow made the bold decision that US home prices had bottomed out and would continue to do so. 0.5% over the next 12 months.
In the months leading up to that call, not only did US home prices, as measured by the Zillow Home Value Index, begin to rise again, they also reached an all-time high. The rally was driven by a tailwind from lower inventory levels, which proved strong enough to offset the headwinds from the mortgage rate shock.
This rebound in US home prices coincided with Zillow repeatedly revising its home price forecasts. Zillow, in its latest revision, expects US home prices to rise 6.5% between July 2023 and July 2024, compared to the 6.3% forecast it announced last month. For perspective, home prices in the US also track it sack schiller The average annual increase has been 5.5% since 1975.
“Limited inventory for sale continues to drive home prices higher even as mortgage rates remain high,” Zillow housing economists wrote. “Just over half as many homes were offered for sale in July compared to the same month in 2019, and 29% more new listings entered the market in July than was typical for this time of year before the pandemic. This shortfall has increased competition for Homes for Sale Homes that were contracted (or “pending”) in July did so in 12 days, a week and a half faster than was typical in 2018 and 2019.
While Zillow economists expect national home prices to rise 6.5% over the next 12 months, their forecast model predicts that 120 of the nation’s 400 largest housing markets will see increases of 7.0% or more in the next 12 months.
There is not just one unifying factor; These 120 housing markets are located across the country. They are found in the West (such as Santa Maria, California), the South (Tampa), the Midwest (Indianapolis), and the Northeast (Scranton, Pennsylvania).
While Zillow believes US home prices have bottomed out – something economists at CoreLogic and AEI Housing Center We also think – and not all companies agree. companies like Moody’s Analytics And Morgan Stanley I think US house prices have a lot to give up, and that will happen between now and the end of 2024.
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