Us house prices to rise 6pc this year

US house prices are predicted to rise by 6 per cent this year, according to the National Association of Realtors.

The median price of existing homes will be driven up across 2012 by increasing sales and falling inventory, the NAR declared this week. Completed existing-home sales in 2012 will total close to 4.6 million, an increase of 9 percent compared to 2011, and are projected to rise another 9 percent next year to nearly 5.1 million.

Pending home sales, too, are higher than last year. Pending transactions were little changed in September, edging up by just 0.3 per cent from August, but are now 14.5 percent above September 2011.

Lawrence Yun , NAR chief economist, said pending home sales continue to hold a higher ground. "Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range," Yun said. "This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013."

In fact, pending home sales have risen for 17 consecutive months on a year-over-year basis, leading to the solid recovery seen in closed existing-home sales this year. In September all regions were showing double-digit increases in contract activity from a year ago with the exception of the West, which is constrained by limited inventory.

The pending home sales index in the Northeast rose 1.4 percent in September and is 26.1 percent higher than a year ago. In the Midwest the index fell 5.8 percent but is 19.3 percent above September 2011. Pending home sales in the South increased 1.0 percent and are 17.6 percent higher than a year ago. In the West the index rose 4.3 percent but is only 0.8 percent above September 2011.

Housing affordability conditions are forecast to remain favorable through next year, adds the NAR, with the 30-year fixed-rate mortgage staying near record lows for the balance of this year but gradually rising to 4 percent in the second half of 2013.