Industry News

Real estate price gains can’t keep up

Forecasters expect significant slow in appreciation rates

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It takes a mother to tell her twin sons apart and it takes an economist to tell the difference between this year's housing market and the last. Most are predicting more of the same hot pace of home sales with a little cooling from record highs due to rising interest rates. But a few differences will mark 2005. "We expect home price gains to slow meaningfully this year," Fannie Mae Chief Economist David Berson said today during a housing and mortgage outlook conference call hosted by the Homeownership Alliance. 2004's home price appreciation rate of 10.5 percent as tracked by the Office of Federal Housing Enterprise Oversight is "clearly unsustainable," he added. This year, Berson anticipates price gains to sustain a 3 percent to 4 percent pace. Median home-price data for 2004 hasn't been released yet, but the National Association of Realtors is expecting an annual price of $183,100 for existing homes. NAR expects sales of existing homes to top 6.64 million for 2004. Some of the ...