According to a majority of property market analysts polled by Reuters, the US house prices are expected to rise over the coming year, faster than the rise in inflation and wage growth.
The main reason cited for the rise in house prices is an acute shortage of affordable homes in the United States that is likely to continue in the coming months.
Key Findings:
“The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.
U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.
About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall from here over the next 12 months.
Existing home sales, which account for about 90 percent of U.S. 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.
That is well below the peak of 7 million units averaged during the previous housing market boom, which will keep prices elevated and make housing less affordable.
When asked to rate the affordability on a scale of 1-10 where 1 is extremely cheap and 10 is extremely expensive, the median answer was 7.”
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