Friday, December 14, 2012

Barclays Capital: Home Values Could Return to Peak Levels As Soon As 2015

Barclays Capital predicts that home prices, off 30%+ after the housing bubble burst in 2007, could return to peak levels as soon as 2015. The long-battered housing market is finally starting to get back on its feet, and some experts believe it could soon become another housing boom.

Signs of recovery have been evident in the recent pick ups in home prices, home sales and construction. Foreclosures are also down and the Federal Reserve has acted to push mortgage rates near record lows.

"In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts," said Stephen Kim, an analyst with Barclays, in a note to clients.

The housing rebound can have a ripple effect that could help get the entire economy growing at a much stronger pace, which will add to more demand for housing.