The CoreLogic house price index rose for the fourth consecutive month in June and the vendor’s chief executive expects prices will remain positive during the second-half of this year.
“While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half,” said president and CEO Anand Nallathambi.
According to the CoreLogic HPI, prices rose 1.3% from May to June and values are up 2.5% from the same period last year. Excluding distressed sales, prices are up 3.2% from a year ago. The Santa Ana, Calif., vendor issued its June report Tuesday morning.
Meanwhile, Fiserv chief economist David Stiff is forecasting that home values will surge in 2013. However, Stiff believes prices are still in the process of stabilizing and his forecast calls for price declines of 1% from the first quarter of this year into the first quarter of 2013. Early next year he sees a recovery that will be on solid footing with prices increasing by 5% from the first quarter of 2013 through the first quarter of 2014.
Even if economic growth remains weak, the Fiserv chief economist expects prices will be resilient. He noted that homes are “incredibly cheap” and “we may be at the point where housing prices can finally withstand a weak economy.”
In addition, the median-priced home is now more affordable than renting. “Consequently, even if economic growth remains weak, the relative affordability of buying will push home prices upward,” Stiff said.
He cautions that the housing market faces uncertainty due to the monetary crisis in Europe and a political impasse in Washington that might trigger huge tax hikes and sharp declines in government spending. “Then we could experience another downward leg in home prices,” he said.