Outlook for US Home Prices Dims

The results of the latest Zillow Home Price Expectations Survey are in: the panel’s expectation for U.S. home values fell to a 3.4 percent average annual rate for the five-year forecast horizon in Q3. This is the first time in 18 months that this proxy for experts’ housing market sentiment has weakened, and it’s the lowest rate recorded in three years.

With slow wage growth persisting and monetary policy liftoff looming, home price expectations may continue to drift lower for some time.