Economists Revise Housing Figures Amid Optimism
Several economists have recently
revised their predictions on housing values to reflect a
stronger-than-expected real estate rebound, and some have even doubled
their original forecasts over the rise in home prices. For example,
economists at Bank of America revised their home price forecast from 4.7
percent this year to 8 percent.
Capital Economics’ Economist Paul Diggle upwardly revised his home
price forecast too, from a 5 percent projection to an 8 percent rise in
home prices this year.
"Prices of both new and existing homes are picking up, the latter by
over 10 percent year-on- year,” Diggle notes. “Indeed, after a couple of
years during which new house prices outperformed, primarily owing to
builders constructing more homes for the higher-end market, we now
expect existing house prices to close the gap. As more consumers are
able to access mortgage credit, home builders should widen their
offering, while continued investment demand will bid up existing house
prices."
Consumers are growing more optimistic about home prices too. A recent
report of consumers from mortgage giant Fannie Mae showed that 48
percent believe home prices will rise over the next year.
Ivy Zelman, an independent real estate analyst, told CNBC last week
that “we’re in a nirvana for housing. I’m the most bullish I’ve ever
been.” Zelman said that home prices could rise for another four to six
years.
Source: “Why A Bunch Of Economists Expect The US Housing Market To Go On A Huge Tear,” Business Insider (March 8, 2013)