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Home sellers should expect modest price gains this year says BNP's Coronado

Nicole Goodkind
Nicole Goodkind
Daily Ticker

Home prices and sales cooled off at the end of 2013. 

Home prices were up a seasonally-adjusted 0.9% in November according to The S&P/Case-Shiller home price index, slightly more than expected. Prices in the nation's largest metros are up 13.7% year-over-year, the biggest gain since February 2006.

Related: 2014 housing outlook: Still a seller's market but better for buyers than 2013

New home sales fell by 7% for December 2013, possibly due to unusually brisk weather (it was the coldest December in four years). Existing home sales, however, rose by 1% for the first time in five months.

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So what does this data mean?

Related: How the Job Market is Killing Housing

“This is a lagging indicator,” says Julia Coronado, North American chief economist at BNP Paribas. “Housing had a great run over the last 12 to 18 months, but we’ve seen some of the more recent data on new and existing home sales slow down quite a bit. We’re not expecting quite a disaster in housing but that momentum we saw last year is probably going to cool off a little bit and we’re looking for a much more modest gain in price appreciation in 2014.”

Related: Is the Housing Recovery Still On Track?

According to Coronado, the U.S. economy in 2014 will be just "okay...we can expect a decent year but it won't beat the wave of optimism we saw growing at the end of 2013."

Coronado expects 2013 Q4 GDP to be around 3% and 2014 Q1 GDP to be 2.5%.

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