The housing market has been showing several signs of recovery, including home prices and home sales on the rise, new construction up, foreclosures falling, and mortgage rates near record lows. Some economists are getting very bullish about the housing recovery and even predicting that the market will return to its â€œboomâ€ level days in just three years.
In a recent report, Barclays Capital predicts that home prices could be back to peak levels by 2015. Barclays is predicting home prices to rise 5 percent to 7.5 percent a year.Â
"In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts," says Stephen Kim, an analyst with Barclays.
Home construction is also expected to soar, rising 20 percent or more a year for the next year, according to some economistsâ€™ forecasts. The new-home market could return to its pre-bubble average of about 1.5 million new homes a year by 2016, CNNMoney reports. That would double the construction level expected this year.Â
"That turn in the [housing] market is occurring now and it should become a boom by 2015,â€ Roger Altman, chairman of Evercore Partners and former deputy Treasury secretary, told CNNMoney.Â
Source: â€œA New Housing Boom,â€ CNNMoney (Oct. 12, 2012)