Fannie Mae economists say that â€œthe broadening housing recovery could very well beÂ more robustâ€ than they anticipated, according to the mortgage giantâ€™s lately monthly economic outlook report.
Low inventories of homes for sale are contributing to rapid price increases all across the country, which are expected to continue throughout this year.
Fannie Mae economists predict that existing-home prices will rise 5.1 percent in 2013, reaching a median $186,000. They also predict home prices will increase another 3.8 percent in 2014, reaching $193,000.
New-home prices are expected to rise 4.1 percent in 2013 to a median of $254,000, followed by a 3.5 percent rise in 2014 to $263,000, according to Fannie Maeâ€™s report.
However, higher-than-expected price jumps mixed with a shortage of for-sale houses could constrain existing-home sales this year and next, according to the economists.
Existing-home sales were up 9.4 percent last year, but Fannie economists predict sales to lessen that pace, growing by 6.9 percent this year and 5.5 percent in 2014. Sales of new single-family homes, however, are expected to post an 18 percent gain this year and a whopping 35.8 percent by 2014.
The economists say that 2016 should be the year where housing activity returns to â€œnormal.â€
As home prices rise, Fannie economists say they expect that will encourage more banks to ease up on the tight lending conditions, which have been one of the major barriers in returning to a more â€œnormalâ€ housing market.
Source: â€œFannie Mae: Housing recovery could be 'more robust' than anticipated,â€ Inman NewsÂ