Home prices will rise in 2013, but not as much as 2012
Forecast: Home prices will continue to rise
Home prices are expected to show continued improvement in 2013, but the gains will be scaled back from those seen in 2012, Clear Capital said in a recent report.
Clear Capital published the results of its Home Data Index (HDI) Market Report earlier this month, the summary of which is that 2013 should bring home price gains, but those price gains are forecasted to be less than half of those in 2012.
“2013 should be interesting for the housing market, where national gains should continue to see upward growth but likely at a more modest rate,” Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital, said in a statement. “Keeping in mind our current gains are off market lows at the start of the year, 2013 gains will be measured against a higher price floor after a full year of recovery.”
Major metro markets show variability
The outlook for 2013 is for “continued, moderate growth” but with continued fluctuations between major metropolitan areas, Clear Capital noted.
“On a local level, we expect to see shifts in the status quo for some hot markets, like Phoenix, as some buyer segments get priced out of recovering markets,” Villacorta said. “As those buyers search for opportunities, markets with improving local economies and low price points, like Minneapolis, could become the new targets.
Despite the forecasted pullback in 2013 home price gains compared with 2012, homebuyer affordability remains high and could spur real estate activity.
“At the end of the day, there are still plenty of great deals to be had across the country, investors looking for decent return, and pent up homebuyer demand on the verge of materializing,” Villacorta said.
Price gains forecasted in every region
Home price gains are forecasted for all four major U.S. regions in 2013, Clear Capital reported.
The West is expected to lead the way with a 2.8 percent price gain overall in 2013, while the Midwest is expected to see yearly home price gains of 2.3 percent.
Home price gains in the South in 2013 are predicted to be about 2.0 percent and the Northeast is expected to see the smallest home price gain of the four regions at 1.4 percent.
Overall, Clear Capital predicts 2.1 percent price growth in 2013.