Home Prices to Bottom By 2013 And Then Rise

U.S. home prices will decline slightly in 2012, falling 0.4 percent for the year, and will increase in 2013, according to the Home Price Expectations Survey conducted by Zillow, which researches real estate. In 2013, Zillow said it expects an increase in home values of 1.4 percent.

The survey was conducted from 114 responses from a group of economists, real estate experts and market strategists; it was based on the projected path of the S&P/Case-Shiller U.S. National Home Price Index during the next five years. "For the first time, the individual economists surveyed were largely in agreement on the trajectory of home prices nationally, signaling that a true bottom may be imminent," Zillow said in a release.

Still, even with an increase of home prices, a majority of the economists said homeownership rates will fall; 56 percent of respondents believe that in five years the U.S. homeownership rate will be below 65.4 percent, the rate recorded in the first quarter of 2012. Further, one in five believe the homeownership rate will be at or below 63 percent, testing or breaking the 62.9 percent rate established in 1965, the lowest on record.

"It's good to start to see some convergence of expectations among economists, as it lends further support to the claim that a bottom is real," said Zillow Chief Economist Stan Humphries. "However, the fact that more than half of respondents believe that the homeownership rate will fall lower should be a sobering reminder that significant challenges remain ahead for the housing market, from negative equity to millions of foreclosed homeowners who now have impaired credit, making a return to homeownership harder than it would be otherwise."