When Will Home Price Increases Slow Down?

These days, it seems like most housing market forecasts are predicting home price increases will begin to slow at some point this year. Whether it's due to improving inventory levels as the number of homes for sale rises or from slower demand due to higher mortgage rates, most industry outlooks say the price spikes of the past couple of years will soon fade. But when exactly? “Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” says Craig J. Lazzara, managing director at S&P Dow Jones Indices. “Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call.” According to S&P's most recent home price index, which covers data through the end of March, home prices continued to increase at a record-breaking pace as the spring season began. In fact, year-over-year numbers show price increases actually accelerated from the previous month's report. But despite the first-quarter increases, market fundamentals still point to a better balanced market in the months ahead, with prices moderating as levels of supply and demand become more in line. (source)

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