Prices for luxury homes in hot housing markets such as Boston's will likely decline over the next few years, the head of home mortgage buyer Freddie Mac said Thursday.
But while appreciation should slow for more affordable homes, Chairman and Chief Executive Richard F. Syron told local business leaders, he expects no nationwide decline in home prices, according to the AP.
Syron said the recent spike in high-end housing prices in places such as metropolitan Boston, New York City and in California constitute a bubble that will soon burst.
Across New England, the average home has risen 28 percent over the last two years - a level of appreciation that is not sustainable because only about a third of the increase can be attributed to factors such as income and population growth, he said.
Syron said he expects prices for the region's middle- and lower-priced homes will continue to appreciate annually, but at a slower rate than in recent years.
Economists have split over whether the rise in U.S. housing prices can be sustained. Syron said recent growth has caused home equity wealth to double in the past seven years, helping to lift the nation's economy out of a recession and sustain its recent modest growth. AM