U.S. housing is set to gain steam this year as a strengthening jobs market offsets the drag from an expected increase in mortgage rates, a Reuters poll showed on Tuesday.
Housing activity has been sluggish since hitting a speed bump in the second half of 2013, with sales constrained by tight inventories and higher prices sidelining first-time buyers.
“We expect the housing market to improve this year. It is only a matter of time until the improved jobs market has a positive effect on the housing market. We are betting that first-time buyers return this year,” said David Nice, an economist at Mesirow Financial in Chicago.
The survey forecast the S&P/Case Shiller composite index of prices in 20 metropolitan areas rising at an average of 4.0 percent this year and next.
In November, the index had been forecast increasing at an average of 3.6 percent in 2015 and 3.1 percent next year.
Home sales, however, will likely remain sluggish early in the year before picking up in the second quarter and maintaining a brisk pace for the rest of the year.