More than 100 forecasters said they expect the U.S. home values to end 2013 up an average of 6.7 percent year-over-year before slowing over the next five years.
The survey of 108 economists, real estate experts and investment and market strategists was sponsored by Seattle-based Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.
While appreciation is expected to remain strong through the remainder of this year, the pace of home value growth is predicted to slow considerably through 2018. Panelists said they expect appreciation rates to slow to roughly 4.3 percent next year, on average, eventually falling to 3.4 percent by 2018.
Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018.
“The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected,” said Stan Humphries, Zillow’s chief economist. “Rising mortgage rates, diminished investor demand and slowly rising inventory will all contribute to the slowdown of appreciation.”