By Tim McLaughlin, Senior Vice President, Weichert Financial
The long anticipated housing bottom appears to be upon us, according to the June Home Price Expectations Survey conducted by Pulsenomics LLC.
The survey, which consists of 114 responses by a group of economists, real estate experts, and investment and market strategists, is based on the projected path of the S&P/Case-Shiller U.S. National Home Price Index during the coming five years. However, 56% of survey respondents also believe that, in five years, the U.S. homeownership rate will be below 65.4%, the rate recorded in the first quarter of this year. One in five believes the homeownership rate will be at or below 63%; the lowest rate on record is 62.9%, which was recorded in 1965.
The June survey results also indicate that most of the panelists expect home prices to increase for the remainder of this year after falling 2% in the first quarter. “In June 2010, the average cumulative appreciation in U.S. home prices expected by our panel was 10.3% for the years 2012 through 2014,” says Terry Loebs, founder of Pulsenomics. “Now, two years later, the average prediction among our experts for the same period is just 3.5%. This translates into $1.25 trillion less housing wealth than expected nationally over the coming three years.”
The S&P Case-Shiller house price index rose 1.3% in April for the first time since August. “With April 2012 data, we finally saw some rising home prices,” said David Blitzer, chairman of the S&P index committee.
Prices in 19 of the 20 cities rose from March to April, with Detroit being the only outlier. Prices in the Motor City fell 3.6% in the month of April.
Since January, the median sales price of previously owned homes has gone up for four straight months, according to the National Association of Realtors. In May, the median price was $182,600, up 7.9% from a year ago.
Additionally, the HPI published by the Federal Housing Finance Agency has edged up three consecutive months, including 0.8% in April.