House prices dramatically increased at the end of 2015 and will be carried through this year, which resulted to a number of complaints from residents because of their inability to afford to buy a home. There's some good news to this, however, as analysts predict house prices will drop by 2017.
Chris Flanagan, the Bank of America analyst, predicted that by next year, the houses will be affordable to the general public based from the US housing market "modest" declines.
His predictions were based on the improved worker pay and the decreasing unemployment rate in the country. House prices will be affected because of this and will soon decline, although it won't happen right away.
"We do not see income growing fast enough to keep with the past few years of rapid increases in home prices," according to Flanagan.
Flanagan explained that this year there will be an expected 3.7 percent increase of house prices which resulted from the dramatic housing price appreciation that occurred in the last quarter of 2015. But it will decline to 1.7 percent in 2017 and 2.1 percent in 2018, and 0.8 percent in 2019.
The prediction indicates that by next year, there will be an increase of affordable houses nationwide.
This is supported by the three-year economic forecast made by the Urban Land Institute (ULI) Center for Capital Markets and Real Estate. They said. "The vast majority of indicators in the forecast indicate favorable economic and capital markets in the US, as well as moderately strong real estate fundamentals and investment returns."
The report added that there will be in an increase of single-family housing this year, from 745,000 in 2015, then 842,000 in 2016, and 900,000 by next year 2017. This will continue in the next years ahead. With the predicted decrease of price growth for the housing properties in the next year, there will be an expected long-term average growth rate.
