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September 30, 2014

Rapid Price Appreciation May Soon Curb

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Rapid Price Appreciation May Soon Curb

After a 10.2 percent rise in home prices in the first quarter of 2013, expect price appreciation to decelerate in 2014, according to economists with CoreLogic. 

CoreLogic predicts that rising home prices and mortgage interest rates, as well as a more balanced inventory of homes for-sale, will cause home prices to even out more next year. 

However, the price rise isn’t over yet. "Record levels of affordability, a slowly improving job market, and very small inventories of new and existing homes for sale will continue to drive U.S. home price appreciation during the summer," says David Stiff, chief economist for CoreLogic Case-Shiller. 

The first quarter of this year marked the first double-digit gain in home prices since the peak of housing seven years ago, according to CoreLogic. 

In Phoenix, home prices have been up 23 percent year-over-year. In Sacramento, prices are up 21 percent; 18 percent in Detroit; and 14 percent in Miami, according to CoreLogic. Most of the housing markets seeing the largest run-up in prices lately are markets that have had a very tight level of homes for-sale. 

"Although double-digit gains usually indicate unsustainable appreciation and, possibly, bubbles in some metro areas, there is less need for concern now since home prices remain 26 percent below their peak nationally and are even lower in many metro markets," said Stiff.

Source: “CoreLogic price appreciation update,” HousingWire (Aug. 1, 2013)

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