The next five years is expected to see US property growth slow considerably, according to new research. The latest Zillow Home Price Expectations Survey revealed that while prices have been increasing rapidly this year, finishing 2013 6.7 per cent higher than 2012, this pace of appreciation is unsustainable and will begin to decelerate significantly as soon as next year.
It is expected 2014 will see value growth drop off to around 4.3 per cent. The survey of 108 economists, real estate experts and investment and market strategists also revealed this will fall further to 3.4 per cent by 2018. This puts the housing market on a firm footing but could dissuade some investors. However, the tempering of growth is important to ensure property prices don't encroach on bubble territory.
Zillow chief economist Dr Stan Humphries said: "The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected. Rising mortgage rates, diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation."
Participants in Zillow's research were also asked about their opinions on whether the federal government should reform the mortgage finance system and how. Of those questioned, 58.4 per cent said involvement should be "somewhat significant", "significant" or "very significant". Just eight per cent believed the federal government should have a "non-existent" role in the market. When asked to define appropriate levels of government backing for mortgage loans, most agreed 35 per cent was the optimum figure. This is roughly what was seen in 2006 at the height of the housing bubble.
"Policy discussions centred on reforming the nation’s housing finance system have only just begun, and it will be very interesting to see what comes out of these debates and how the market will react to new proposals," Mr Humphries said, adding that the amount mortgages will end up costing average buyers is one of the most critical issues for the market.
Article by +https://plus.google.com/100585359199579398168?rel=author on behalf of Propertyshowrooms.com
It is expected 2014 will see value growth drop off to around 4.3 per cent. The survey of 108 economists, real estate experts and investment and market strategists also revealed this will fall further to 3.4 per cent by 2018. This puts the housing market on a firm footing but could dissuade some investors. However, the tempering of growth is important to ensure property prices don't encroach on bubble territory.
Zillow chief economist Dr Stan Humphries said: "The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected. Rising mortgage rates, diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation."
Participants in Zillow's research were also asked about their opinions on whether the federal government should reform the mortgage finance system and how. Of those questioned, 58.4 per cent said involvement should be "somewhat significant", "significant" or "very significant". Just eight per cent believed the federal government should have a "non-existent" role in the market. When asked to define appropriate levels of government backing for mortgage loans, most agreed 35 per cent was the optimum figure. This is roughly what was seen in 2006 at the height of the housing bubble.
"Policy discussions centred on reforming the nation’s housing finance system have only just begun, and it will be very interesting to see what comes out of these debates and how the market will react to new proposals," Mr Humphries said, adding that the amount mortgages will end up costing average buyers is one of the most critical issues for the market.
Article by +https://plus.google.com/100585359199579398168?rel=author on behalf of Propertyshowrooms.com