Either home prices or housing starts will surge, economist predicts – Denver Post

Either home prices or housing starts will surge, economist predicts – Denver Post



A shortage of homes available for sale could trigger either a sharp rise in U.S. home prices or a surge in new construction next year, predicted a leading housing economist in Denver on Friday.
U.S. home prices could rise 10 percent next year or housing starts could surge 70 percent to 1.2 million, predicted Lawrence Yun, chief economist of the National Association of Realtors.
"It is either starts or prices, not both," Yun told attendees in Denver for the annual conference of the National Association of Real Estate Editors.
Yun said his updated forecast differs from the NAR's official forecast of 3 percent to 5 percent home-price appreciation this year and next.
The sharp decline in inventories of homes for sale in recent months is behind the optimistic outlook, Yun said.
One reason supply hasn't kept pace with demand is that a significant share of homeowners can't sell without bringing money to the closing table.
About 31.4 percent of U.S. homes with mortgages remain underwater, or worth less than what is owed on them, said Stan Humphries, chief economist at Zillow, an online real-estate data provider.