Housing prices will rise more this year in the Midwest than the national average, said Diane Swonk, deputy chief economist of First Chicago NBD Corp.
Midwest home prices are expected to rise 4.9 percent this year, a half-point above the U.S. average, Swonk said in a special housing edition of the First Forecasts newsletter.
“We have a high level of affordability combined with extraordinary gains in some of our wealthiest markets, including Chicago’s Lincoln Park and Gold Coast neighborhoods,” she said.
Still, the Midwest’s growth rate of housing starts and sales will lag the national average.
The Midwest’s economy has been expanding longer than other regions and tight labor markets have made it hard for businesses to add workers to build new houses, she said.
Regional sales of existing homes are expected to rise by 4.5 percent, to 1.26 million units, less than the 5.3 percent national increase.
Midwest housing starts should rise 1.8 percent to 310,000 units, compared to a 3.5 percent gain nationally.
