U.S home prices are expected to have risen 10.2% in 2013, according to Case-Shiller. But are expected to cool, rising just 6.3% this year.
Rising mortgage rates, tight inventory, and reduced affordability weakened housing demand.
“Months’ supply, which is the ratio of inventory to sales, held at low levels through the year. This means that inventory has declined in tandem with the drop in sales,” writes Bank of America’s Michelle Meyer.
And she thinks this is still a seller’s market:
“We expect this to become increasingly evident, resulting in a pickup in inventory this year. Housing completions are set to increase, catching up with the gain in housing starts. This will allow the buyers of new construction homes to move to their new properties and sell their existing.
“Moreover, the rise in home prices has put many more homeowners in positive equity, making it more feasible to sell their property. A modest rise in supply would be a healthy development for the housing market as it would generate greater housing turnover and home sales. It will, however, also slow home price appreciation.”
The University of Michigan survey shows that 40% of respondents think now is a good time to sell their property, up from 20% a year ago.
The data over the coming months could be impacted by the extremely cold weather but we’ll keep an eye out for the overall trend.