While most people believe modest appreciation going forward, I’m not sure how likely that is. Every kind of valuation chart that has had this large quick run up hasn’t resulted in us staying at those levels or generally going up from those levels. Usually those valuations have fallen pretty substantially after the peak.
Improving per capita income, lower interest rates, and comparable rent rates going up help, but how likely are those 3 things acting in unison going forward. If incomes and rental rates are increasing then you’ll have a significant headwind of higher rates most likely. Certainly we might have modest appreciation in the short term, but the inevitable recession, the likely hood of higher rates create a lot of headwinds for housing appreciation over the longer term, especially when Rich’s valuation index is already at the highest level other than the bubble peak.