Slow price increase is not bad news
After the recession, the dramatic rise in home values was good news. Today, the moderate price gains are equally good news for the market.
The Washington Post’s Dina ElBoghdady says that if prices remain low, potential buyers who have been pushed out of the market because of the double-digit price gains can return and help recover home sales, which have recently remained below historic norms. Michael Gapen, a senior U.S. economist at Barclays says that “whatever asset you’re buying can’t forever increase at a faster pace than your income.” He adds that the moderation in home prices reflects a normalizing home market.
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