While some read recent home price gains as a sign of an improving market, Radar Logic warns the recent gains are “unsustainable” and may actually be dampening market recovery.
Radar Logic attributes recent house price gains to anomalous factors it
considers temporary, including low interest rates and elevated investor
demand. “None of these drivers are likely to last, particularly as
housing prices increase,”
Radar Logic anticipates prices will decline again as rising prices begin
to repel investors while simultaneously leading to bursts in supply as
homeowners and financial institutions feel encouraged to list properties
for sale.
Already, home builders have begun to add to supply with a 23.6 percent
rise in single-family housing starts year-over-year in January,
according to data from the Census Bureau.
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