According to an article in Propertywire, a recent survey has shown real estate experts in the US expect prices to have risen by an average of 6.7% by the end of this year. These figures were obtained by the Zillow Home Price Expectations Survey and the are the opinion of 108 experts in the US.
After this year price growth is expected to slow for the next five years, and interestingly experts would like to see the government continue to play a role in the mortgage loans market. Next year prices are expected to increase by approximately 4.3%, but after this prices are being predicted to increase more gradually declining to just 3.4% by 2018. Based on these predictions, it’s expected that home values in the US will eventually exceed that peak reached in May 2007, but it will take until the first quarter of 2018. By the end of 2018 the average home value could be in excess of $200,000.
It’s hardly surprising that the real estate market is expected to cool slightly as recently prices have risen substantially at a rate that some consider to be unsustainable. But it’s expected that increasing mortgage rates combined with a decreased demand by investors will help to slow the market, especially as inventory levels are gradually increasing.
The real estate predictions for price increases this year did vary quite considerably, as the most optimistic are predicting prices will have risen by 8.3% by the end of this year, while the least optimistic predict rises of just 5.6%. This has changed slightly from the last survey, where the most optimistic expected prices to have increased .9 .3% by the end of 2013, compared to just 5.1% amongst those who were less optimistic. By the end of 2018, the most optimistic of those surveyed predict prices will be approximately 12.5% higher than the peaks seen in 2007, compared to the least optimistic who are predicting that prices will be 6.2% below the peaks seen in 2007.
At the moment a number of different schemes are being proposed and examined to help reform the mortgage finance system, and all seek to reduce the government’s involvement to some degree. When participants were asked about the government’s involvement in the mortgage markets, more than half thought it should retain a significant role, while just 8% thought the government should not have a role in the market. Currently the government backs approximately 90% of mortgages in some form or another, but in comparison it backed just 50% of mortgages in 2000.