The housing market is changing rapidly, but one aspect of it that certainly does not seem likely to stop any time in the near future is that home prices are rising on an annual basis. This happened once again in November, and many experts predict that it will continue to do so for some time to come.
However, it should be noted that the sizable increase of 11.8 percent on an annual basis from November 2012 to the same month last year of 11.8 percent is not likely to be observed as much going forward, according to the latest Home Price Index from the housing market tracking firm CoreLogic. It was, though, the 21st straight month in which there was an increase of any size on an annual basis, and that trend seems unlikely to abate any time in the near future.
"The housing market paused as expected in November for the holiday season with very low month-over-month appreciation," said Dr. Mark Fleming, chief economist for CoreLogic. "Year-over-year home prices are up an impressive 11.8 percent. Our pending HPI projects that home prices will grow by 11.5 percent for the full year 2013. That will make 2013 the best year for home-price appreciation since 2005."
Is a slowdown coming?
One thing that consumers should try to keep in mind going forward is that home prices aren't going to continue to surge at this rate, and the above-mentioned 11.5 percent improvement in December seems to reflect that, the report said. While that may be a seasonal adjustment overall, it nonetheless remains true that many experts believe that home price increases will slow to far more reasonable levels in 2014; some have even noted that if they continue at or even near the current rate, they could serve to create another housing bubble.
Prospective homebuyers will have to keep a close eye on conditions in the housing sector, because the combination of rising prices and rates that are set to spike in the coming months could serve to price many of them out of the market for a while. Consequently, it's important that shoppers keep these issues in mind going forward, as finding out that conditions have changed while in the middle of the purchase process could lead to significant frustration.
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