What will happen with house prices in 2015?

What will happen with house prices in 2015?

The following graph shows the year-over-year change in the seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 SA was up 4.9% compared to September 2013, the Composite 20 SA was up 4.9% and the National index SA was up 4.8% year-over-year. Other house price indexes have indicated similar gains (see table below).

Although I use Case-Shiller, I also use several other price indexes. The following table shows the year-over-year change for several house prices indexes. The year-over-year price increases slowed in 2014, but the slowdown is probably mostly over (I don't expect prices to go negative year-over-year).

Index	Through	Increase
Case-Shiller Comp 20	Sept-14	4.9%
Case-Shiller National	Sept-14	4.8%
Corelogic	Oct-14	6.1%
Zillow	Oct-14	6.4%
Black Knight	Sept-14	4.6%
FNC	Oct-14	5.7%
FHFA Purchase Only	Sept-14	4.5%

Some of the key factors in 2012 and 2013 were limited inventory, fewer foreclosures, investor buying in certain areas, and a change in psychology as buyers and sellers started believing house prices had bottomed.  The investor buying has slowed - as have distressed sales.

The consensus of housing analysts appears to be for price increases of around 3.5% in 2015.

In 2015, inventories will probably remain low, but I expect inventories to continue to increase on a year-over-year basis. Low inventories, and a better economy (with more consumer confidence) suggests further price increases in 2015. I expect we will see prices up mid single digits (percentage) in 2015 as measured by these house price indexes.

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