Home Values to Level off in Five Years

The latest Zillow Home Price Expectations Survey reveals home values have been rising quickly this year and will end at 6.7 percent over 2012. The next five years will see that rise cool off, falling to 4.3 percent appreciation in 2014 and 3.4 percent by 2018. Zillow Chief Economist Dr. Stan Humphries says, “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.” Of 108 housing industry professionals surveyed, 58.4 percent say the federal government should have a significant role in the conforming mortgage market. Humphries adds: “Policy discussions centered 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. How much mortgages will end up costing average consumers, and the continued availability of traditional mortgage products like the 30-year fixed rate mortgage, are among the critical issues currently at stake for consumers in these debates.” MHProNews understands Pulsenomics founder Terry Loebs says, prior to the bubble, in 2000, the government backed 50 percent of new mortgages, but that has grown to approximately 90 percent today.

(Image credit: Fotosearch)

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