Home prices in the U.S. have been increasing, but the pace has slowed down. Now, experts have predicted that this trend will continue through the next 12 months.
According to Realtor.com's confidence index, a measure that gauges the housing market strength on the basis of a survey on 50,000 real estate agents, home price gains will be modest in the next year and will gain only by 3.4 percent in the period.
Experts said that though the price rise will vary locally, the gain won't exceed the 3.4 percent forecast because lending standards are still high in the country. Also, the weak job recovery and wage report could add to the sluggish pace of price rises.
Prices in Arizona, New Mexico, Virginia and some others are expected to go up by less than one percent. Texas, Florida and Hawaii are expected to see the highest price gains going up more than five percent to eight percent.
Home prices in the U.S. went up 1.2 percent in July on a month-on-month basis and 7.4 percent on a year-over-year basis, according to the latest CoreLogic data.
"Home prices continued to march higher across much of the U.S. in July. Most states are reaching price levels not seen since the boom year of 2006," Anand Nallathambi, president and CEO of CoreLogic, said in a statement.
"While home prices have clearly moderated nationwide since the spring, the geographic drivers of price increases are shifting. Entering this year, price increases were led by western and southern states, but over the last few months northeastern and Midwestern states are migrating to the forefront of home price rankings," Sam Khater, deputy chief economist for CoreLogic, added.
But, experts urge not to read in too much into the data explaining that the index has been rebuilt and that is why the numbers look stretched and different.
"The data change made it looked like the philosophy had changed but it hadn't. The only takeaway is the two indexes are different. I don't think you can say anything more than that," David Stiff, Case-Shiller principal economist, told Bloomberg.
The S&P/Case-Shiller housing index - an indicator of home prices in major U.S. cities - went down 0.1 percent in June on a seasonally adjusted basis. The 10-city index fell 0.1 percent, while the 20-city index declined 0.2 percent.
