House price growth is quickly entering boom territory, with both Case-Shiller and FHFA reporting a surge in annual gains in September. At 9.1% y/y, the rise on the FHFA index is the highest in almost 15 years. But there are several reasons to expect this boom will prove short-lived. Pent-up demand from the spring and the surge in buyers looking to escape cities will soon fade. Coupled with tight credit conditions and subdued house price expectations, we expect growth will moderate to around 2% y/y by end-2021.
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