Will Home Prices Jump 9% in a Year?

Housing market improvements during the past year or so have led to significant increases in home prices nationwide, and they are expected to continue to rise.

On a quarterly, semi-annual or year-over-year basis, all projections show that home prices will continue to rise in the near future, according to the latest Home Data Index Market Report from the real estate market analysis firm Clear Capital. The company projects that by the end of the third quarter, prices will be up 1.4 percent, as well as 1.6 percent by the end of the year. However, by the end of June 2014, prices will likely be 8.6 percent higher, up from the 2.6 percent growth projected in April.

This sizable increase is due to the improvements in the market and the broader economy during the past few months, the report said. The forecasts for the year-over-year changes should be larger than the historical averages of between 4 and 5 percent, but more or less in line with those predicted for 2013.

Overall, 45 of the nation’s 50 largest cities are expected to see yearly growth in the second half of this year, the report said. Las Vegas, in particular, saw the largest increases in expected gains at 29.3 percent, and was one of seven cities with price gains of more than 20 percent. Of those projected to see price drops, all but one will see declines of less than 0.5 percent.

“June home price trends and forecasts were nearly all positive across the country,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “We saw quarterly, yearly and six month forecasts all tick up, relative to the past few months’ performance. These improved trends signal spring buying activity continues to have a positive impact, while our forecasts point to moderation ahead. Certainly this is an interesting and important dynamic unfolding and while it could seem contradictory at the surface, perspective lends clarity.”

Rising prices will likely encourage a large number of homeowners across the country to at least consider listing their properties on the market for the first time in years. That, in turn, could serve to make it easier for would-be buyers to find affordable options even as demand remains somewhat high.

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