For the first time, the economists questioned in Zillow’s monthly Home Price Expectations Survey—which surveys 114 economists, real estate experts, and investment and market strategists—are largely in agreement about where home prices are headed. Their verdict: Prices will fall only 0.4% in 2012, according to the June survey released today. Prices are expected to start rising next year, with anticipated gains of 1.3% in 2013, 2.5% in 2014, 3.0% in 2015, and 3.3% in 2016, compared to current prices.
Among the dissenters, the most optimistic foresee a 1% price improvement this year, while the most pessimistic anticipate an average fall of 2%.
But while prices are expected to tick up, the homeownership rate is expected to move down. Among survey respondents, 56% anticipate that by June 2017, the homeownership rate will be at or below 63%.
"It’s good to start to see some convergence of expectations among economists, as it lends further support to the claim that a bottom is real," said Stan Humphries, chief economist at Zillow. "However, the fact that more than half of respondents believe that the homeownership rate will fall lower should be a sobering reminder that significant challenges remain ahead for the housing market, from negative equity to millions of foreclosed homeowners who now have impaired credit, making a return to homeownership harder than it would be otherwise."
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.