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U.S. house price gains seen moderating over next few years: poll

(Reuters) - U.S. house price rises will likely slow further over the next two years, curbed by tight lending standards, slow wage growth and a lack of first time buyers, a Reuters poll found.
Home price gains, which have already begun to moderate, are seen rising 7.5 percent this year but only 4.0 percent by 2016, according to the median forecasts of the 31 analysts surveyed.
That is a significant slowdown from the 12.4 percent rise reported in the 12 months through March on the S&P/Case-Shiller gauge of property values in 20 metropolitan areas.
The analysts polled did not expect any major pickup in housing market activity, with annual rises in house prices gradually coming down through to 2016.
"It is improving slowly, which is good. It should be measured. We don't want to go back to stupid money," Mark Goldman, a real estate expert at San Diego State University in California said, referring to the eve of the Great Recession when subprime lending was rampant and home prices sky-rocketed.
The housing market lost some momentum toward the end of 2013 and through the first few months of this year, held back by rising mortgage rates and unusually cold weather that caused the economy to contract at an annual rate of 1 percent in the first quarter.
During that quarter, residential investment fell at an annual rate of 5 percent.
Federal Reserve Chair Janet Yellen said in recent testimony that the housing slowdown is a concern and could last longer. The latest Reuters poll appears to support that view.
Home resales were expected to reach a 4.75 million unit annual rate in the second quarter of this year, and to continue that upward trajectory to 5.10 million in the first quarter of 2015, according to the Reuters poll.
Resales stood at a 4.65 million rate in April.
"We are seeing a state of equilibrium," said Goldman at San Diego State University. "I don't see any symptoms that would cause housing prices to go up or down significantly."
Property analysts don't appear to have much conviction on whether the market is getting too expensive, either.

Asked to judge whether the U.S. housing market was fairly valued on a scale of one to 10, with 10 being extremely overvalued and one being extremely undervalued the median answer was five.


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