Friday, March 15, 2013

JPMorgan More Than Doubles Forecast for U.S. Home Price Gains in 2013

The housing boom is on.

JPMorgan Chase & Co. (JPM) more than doubled its forecast for U.S. home price gains in 2013 to 7 percent this week, and predicts a more than 14 percent increase through 2015. Bank of America Corp. (BAC) said last week property values will jump 8 percent this year, up from a prior estimate of 4.7 percent in a report titled “Someone say house party?”

Says Bloomberg:
The two biggest U.S. banks are predicting an accelerating rebound as homebuyers and investors rush to acquire a dwindling supply of properties and the Federal Reserve pushes down borrowing costs by buying mortgage bonds.
 Home prices rose 6.8 percent in December from the year earlier, the biggest gain since 2006, according to the S&P/Case- Shiller home-price index of 20 cities.

But, it is not clear how Bernanke will be able to land his helicopter once the price inflation accelerates.

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