Economists Predict Further Growth of US House Prices In Coming Years
Reliable US labor market, which stimulated the growth of economic activity and demand for housing, helps restore the price of housing in the country. House prices in the US lost more than a third of their value ten years ago, which led to a financial crisis and a deep recession. According to analysts, shortage of affordable homes in the United States will continue over the coming year, driving prices up faster than inflation and wage growth.
Economists predict, that the S&P/Case Shiller composite index of home prices in 20 cities will increase by 5.7% this year. That compared to predictions for average earning growth of 2.8% and inflation of 2.5% 2018. The US house prices are forecast to rise 4.3% in 2019 and 3.6% in 2020. Existing home sales, which account for about 90% of US turnover, are now forecast to rise slightly and average 5.60 million units in each quarter this year from about 5.46 million units in April.
Another potential hurdle for home buyers are rising mortgage rates. According to the poll, the average 30-year mortgage rate will rise to 4.60% by year-end and then touch 5.0% by end-2019.