Home-price appreciation is increasing across most of the U.S., demonstrating that the housing market is turning around after the most severe downturn since the Great Depression. Prices rose by 8.1% in January from the previous year, the largest gain in six and a half years in twenty major metropolitan cities.
Prices typically decrease in the winter months, but rose 1% in January from December, when prices usually fall. Housing demand is growing, while the number of homes for sale has fallen to the lowest number in decades.
Lower mortgage rates are helping homeowners qualify for a mortgage without a big increase in monthly payments. Supply shortages were caused by homeowners unwilling to sell their home because prices had declined, and builders have also not been constructing as rapidly due to competition from bank foreclosures.
Many economists predicted that prices would rise slowly throughout this year, but the conditions that created last year’s increase (low inventories, a growing economy, strong investor demand, and low mortgage rates) are stronger than last year. Economists at Morgan Stanley now predict prices to increase 6-8% this year. And others are calling for a 10% increase this year.
Phoenix has increased the largest in home price, with a 23.2% jump.
If you are looking to purchase or sell real estate, feel free to contact Pulgini & Norton, LLP at (781) 843-2200 or (888) 344-2046, or email us with any questions you may have. Our attorneys offer nearly 40 years of combined legal experience and provide thorough, timely, and results-driven service in many aspects of both residential and commercial real estate.
Home Prices Are Accelerating Across the U.S., Nasdaq, March 26, 2013