Moody’s: Home Prices to Increase, Loss Severities to Remain High

From Home prices will increase over the next three years as the economy expands and servicers work through their distressed inventories, according to a report from Moody’s Analytics. However, the firm predicts rising prices will not be enough to offset anticipated rising loss severities.Home prices will rise about 4.2 percent between the fourth quarter of last year and the fourth quarter of 2015, according to Moody’s. “Not only will several years of solid job and household growth help home values by the end of this period, housing markets throughout the nation will have worked off most of the remaining distressed inventory,” Moody’s said in its report.

Recent price gains have resulted from high affordability, soaring investor interest, and low inventories with declining foreclosure inventories playing a major role.

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