Home Values Expected To Rise 20% By 2018

A panel of economists and housing analysts asked to predict future home price growth, homeownership, and demographic trends said they expect home prices to rise, on average, 19.5 percent through December 2018. Their forecast matches the outlook of a similar panel convened earlier this year. Among the panelists, the most optimistic quartile predicted a nearly 28 percent increase by 2018, while the most pessimistic expected a mere 11 percent rise over the next four years. This year, they expect a 4.6 percent increase in nationwide home prices. The panel also said they expect the age of the typical first-time home buyer to begin to rise, as the Millennial generation enters their prime home buying years. Experts expect this trend to lead to a drop in the homeownership rate. Because younger Americans are getting married and having children later in life, they will also likely delay homeownership, which will lead to a shift from historical norms. Dr. Stan Humphries, Zillow’s chief economist, said the Millennial generation will have an enormous influence in coming years because of its huge size and diversity of housing preferences and opinions. More here.

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