The U.S. housing market has been improving considerably during the past 12 months and that continued into February, prompting some experts to project even larger gains as the spring buying season begins.
The national average home prices observed at the end of February were up 6.1 percent on an annual basis, and also experienced more modest gains from six months and one quarter prior as well, according to the latest Home Data Index issued monthly by real estate tracking firm Clear Capital. That constituted the largest annual growth since August 2010, which itself was spurred not by independent consumer interest, but rather a homebuyer tax credit issued by the federal government to encourage more property sales.
This charge toward higher prices at an annual rate was led by the West, where prices rose 13.6 percent year-over-year, the report said. The South was next with a far more modest spike of just 5.1 percent, while the Midwest saw values rise 4 percent and the Northeast brought up the rear at 2.6 percent.
“While February’s yearly growth of 6.1 percent is encouraging, let’s keep in mind this rate of growth is measured against the market’s bottom, which we reported in our March 2012 Market Report,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Consumer confidence continues to be vital to a broader housing recovery, and national quarterly home prices expanding 1 percent in the midst of winter is confirmation the recovery has legs. While 1.0 percent is weaker in comparison to more recent rates of quarterly growth, the positive trend continues to support homebuyer confidence and is on par with the new normal.”
As a result of all the activity increasing on even a quarterly basis during seasonal housing downturns in general, it’s likely that prices will rise more appreciably in the spring months, the report said.
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This may be both because that is a popular season for buying and selling and rising prices will likely encourage more sellers to come onto the market, which in turn will help to meet high demand from those currently shopping for properties. It’s believed that prices will keep rising fairly steadily — though perhaps not at the levels seen in the last year — at least through the end of 2013 and perhaps beyond.
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