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Study: Housing Market Should Rebound by 2018

A new study released today forecasts that while the housing recovery will be uneven across the U.S. in the next five years, the housing market is expected to rebound by 2018.

The study from the Demand Institute (a nonprofit think tank operated by The Conference Board and Nielsen) predicts that the median price of a single-family home will be at the 2006 peak reached before the housing collapse.

Via Reuters:

Among the 50 largest metropolitan areas where housing prices are expected to appreciate between 2012 and 2018, the top five will see rises on average of 32 percent, while the bottom five will average gains of only 11 percent.

The cities expected to report the largest increase in the median price of a previously owned single-family homes are Memphis, Tampa, Jacksonville, Milwaukee and St. Louis.

Those with the lowest projected price appreciation are Washington, D.C., Oklahoma City, Denver, Minneapolis and Phoenix.

“The strength of the local housing market is among the most telling metrics that helps us assess community health and well-being,”  Louise Keely, chief research officer at the Demand Institute and co-author of the report, told the news wire.

The nearly two-year study of more than 2,000 cities and towns across the U.S. showed the expected gains and delays in housing prices.

The five states likely to see the largest gains in median prices: New Mexico, Mississippi, Maine, Illinois and New Hampshire.

The five states likely to see the lowest gains in median prices: Alaska, Minnesota and then already price-spiking New York and Virginia.

The study predicted that the national median price for an existing single-family home will rise at a much slower rate in the coming years than in 2013, when prices advanced 11.5 percent. The study sees prices growing at an annual rate of 2.1 percent between 2015 and 2018, as supply and demand begin to even out.

The study pointed out another lesser-obvious trend: Home prices had been in recent years driven up by companies and wealthy individuals buying devalued homes — in effect artificially inflating demand.

The rise in home prices in the next five years, the study said, would be driven by the formulation of new households.

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