U.S. housing market recovering but price rises seen modest

by 11 Sep 2012

(Reuters) - The U.S. housing market is starting to recover and home prices will see modest growth this year and next, according to a Reuters poll, which also suggested the property market would get little boost from any Fed buying of mortgage-backed debt.

Recently there have been signs the housing sector is improving, and many economists think home building will add to economic growth this year for the first time since 2005.

Indeed, 35 of 38 economists polled in the past week said the market was recovering.

But the pace of recovery is still painfully slow. Analysts think house prices in the United States, as measured by the S&P/Case Shiller composite index of 20 metropolitan areas, will rise just 1 percent this year, according to the median forecast in the Reuters poll.

That is an increase from a forecast of flat prices in a poll carried out in July, but still unlikely to keep up with inflation. Consumer prices are expected to rise 2 percent this year and in 2013.

"We still have years to go for a full recovery," said Scott Brown, an economist at Raymond James in St. Petersburg, Florida.

The poll forecast house prices would rise 2.5 percent next year, up from a projection of 1.8 percent in the July poll.

Read full article from Reuters


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