BENGALURU: US house prices will continue to race ahead this year, at nearly twice the pace predicted just three months ago, according to a Reuters poll of analysts who said risks to that already upbeat outlook were skewed to the upside.
A strong recovery so far from the pandemic, ultra-low interest rates, massive fiscal support and continued demand for more living space as millions continue to work from home will push house prices higher this year, they said.
The S&P CoreLogic Case-Shiller 20-metro-area house price index has risen at a steady clip since the middle of last year and has averaged over 11% growth so far in 2021.
That measure of US house prices is forecast to outpace GDP growth and consumer inflation - rising at a blistering pace to average 10.6% this year, almost double the 5.7% predicted in February, according to the May 11-24 poll of 40 property analysts.
If realized, it would be the fastest annual house price inflation rate since 2013.
Over three-quarters of analysts, 27 of 35, who answered an additional question said the risk to their outlook was skewed more to the upside over the coming year, while the remaining eight said more to the downside.
When asked if the current pace of price rises would be sustained this year, two-thirds of 34 analysts said yes.
The US 30-year mortgage rate was forecast to edge up to average 3.3% this year and 3.6% next but was not expected to reach its pre-Covid-19 high of 3.8% until 2023.