2013: How Rising Prices Could Boost Housing Demand

December 19, 2012

in News

2013: How Rising Prices Could Boost Housing Demand

Potential buyers now have something they haven’t had in a long time: urgency. This next year will be the first time since 2006 where prices ended the previous year in positive territory. Surveys already show that buyers’ expectations of future home prices have improved throughout the past year. Just as falling prices have frozen buyers and sellers in place in recent years, housing strength may be even stronger than current indicators show given the powerful shift in sentiment that price increase may bring. “Every single thing about housing is flashing green,” said James Dimon, chief executive of J.P. Morgan Chase, in an interview with CNBC. Household formation is rising, inventory is falling, and affordability is near a record high. Meanwhile, rising rents are likely to encourage more renters to buy. Rising prices could eventually encourage more sellers to put their homes on the market, which would help boost demand even further. [Read this article]

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