After sales of single family homes grew 2% in February, Kiplinger's Rodrigo Sermeño expects an improving housing climate. Part of the reason lies in more inventory.
We expect inventories of existing homes put up for sale to improve this year as more folks, buoyed by job and wage gains, put their homes on the market in anticipation of buying another dwelling. More home construction in coming months plus a growing availability of existing homes for sale will help ease supply constraints.
Prices should also continue to rise.
Home prices will continue to appreciate at a moderate pace this year, on average. The S&P/Case-Shiller National Home Price Index rose 5.4% in January compared with January 2015, continuing the upward trend of recent months. Note that low home inventories are pushing up prices to especially high levels in some metro areas of the West. Cities such as Portland, Seattle and San Francisco are seeing home prices rise at a double-digit pace.