Housing Industry Trends 2014Posted 07/22/2014
Although real estate experts remain cautious when forecasting the future of the housing market, the vast majority appear to be quietly optimistic about 2015 and beyond. And much of that assurance stems from recent positive overall trends — while slightly cooled as of late — including growing equity, a rebound in new- and existing-home sales and a decline in foreclosures.
According to a June joint report from the federal Treasury and Housing and Urban Development departments, purchases of new homes in May increased by 18.6 percent, which was the largest monthly gain in 22 years and the highest level since May 2008. The positive scorecard also showed a continued downward trend in foreclosures to the lowest level since December 2005 and 32 percent lower than one year ago.
Home prices continue to follow a positive trend as well. CoreLogic, a North American real estate information and analytics company, just released its May 2014 Home Price Index (HPI) indicating home prices rose 8.8 percent when compared to May 2013. That number represents 27 months of consecutive year-over-year increases in home prices nationally. Using the information compiled in its May 2014 HPI, CoreLogic provided a market forecast, which indicates that year-over-year home prices should continue to increase by as much as 6 percent from May 2014 to May 2015.
According to Anand Nallathambi, president and CEO of CoreLogic, rising home prices have both positive and negative implications for the housing market. He said that while the rapid rise in prices over the past few years has elevated many homeowners out of negative equity, it also has become a drag on buying decisions for prospective purchasers weighing affordability concerns. However, Nallathambi remains optimistic. “As we move ahead, a moderation in home price increases over the next twelve months should help cool things down a bit and keep the housing recovery going,” he said.
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