Given everything that’s going on in the world these days, predictions about what’s going to happen over the next 12 months should be taken with a grain of salt. However, one area where things seem to be relatively stable is the nation’s housing ecosystem.
While the pandemic has severely impacted the nation’s economy and left millions and millions unemployed, the housing economy is on track for one of its best years ever.
Case in point: the latest data from the Federal Housing Finance Agency shows that between July 2020 and August 2020, house prices rose at a record pace. According to the FHFA, “between July and August 2020, national prices increased by 1.5%, which represents the largest one-month price increase observed since the start of the index in 1991.”
And while the difference in house prices varies by region, new analysis from Veros Real Estate Solutions suggests that home prices will continue to “increase sharply” over the next year in the nation’s 100 largest markets.
According to Veros, much of the continued strength of the housing economy is expected to be based on the same thing it’s been based on this year: low interest rates.
“At the onset of the Coronavirus pandemic in the United States, there was a short impact on nearly all housing markets with a month or two of softening,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “After the initial shock, consumers embraced low interest rates and home prices returned to their pre-pandemic level and continue to move upward.”
That trend is expected to continue over the next 12 months, but there are some housing markets that will be even hotter than the rest. In fact, according to Fox, house prices in half of the top-10 hottest markets are expected to increase by more than 10% in the next year.
Here, courtesy of Veros’ Q3 2020 forecast, are the 10 housing markets that are expected to be the hottest over the next year:
- BOISE CITY, ID; house prices expected to rise 12.1%
- OLYMPIA-LACEY-TUMWATER, WA; house prices expected to rise 11.2%
- SPOKANE-SPOKANE VALLEY, WA; house prices expected to rise 10.3%
- PHOENIX-MESA-CHANDLER, AZ; house prices expected to rise 10.2%
- BREMERTON-SILVERDALE-PORT ORCHARD, WA; house prices expected to rise 10.1%
- OGDEN-CLEARFIELD, UT; house prices expected to rise 9.7%
- COLORADO SPRINGS, CO; house prices expected to rise 9.3%
- LONGVIEW, WA; house prices expected to rise 9.2%
- SALT LAKE CITY, UT; house prices expected to rise 9.2%
- IDAHO FALLS, ID; house prices expected to rise 9.0%
As Veros notes, markets in the western part of the U.S. make up the entire list of hottest housing markets. Beyond that, Veros states that there is no major metro area in the U.S. where home prices are expected to fall in the next 12 months.