Experts: Home-Price Appreciation to Slow Down Through 2016

Home values are expected to appreciate by 4.4 percent on average through the end of the year, but that rate will slow to 3.8 percent in 2015 and 3.4 percent in 2016, say 106 economists, real estate experts, and investment and market strategists surveyed by Pulsenomics LLC.

After a sharp double-digit percentage increase in home values last year, the rollback in appreciation would put them more on par with historical norms. Prior to the housing bubble years of 1987 to 1999, home values averaged 3.6 percent growth per year.

The majority of economists surveyed say they expect median home values to exceed their pre-recession peaks by the first quarter of 2018. They cited the following as the most common concerns for declining housing affordability: income growth (28%); abnormally high rates of home-price and rent appreciation (27%), and an abnormally low supply of homes for sale or rent (21 percent).

“Time will tell whether Washington’s unfolding plan to expand mortgage credit will have a durable, positive impact on home values, housing confidence, and market expectations,” says Terry Loebs, founder of Pulsenomics.