We've been warning that double-digit year-over-year home-price increases would likely end soon.

Perhaps we were too pessimistic. CoreLogic’s Pending Home Price Index report for September puts price growth in the 12.7%-range, and shows 0.2% appreciation month over month. This suggest home prices could continue to grow at a double-digit year-over-year rate through the end of the year.

To be sure, home prices could continue to post double-digit gains through 2013, but we doubt they will be sustained much longer than that. Double-digit annual gains are simply unsustainable for an extended period of time.

The good news is that single-digit annual price gains – 3%-to-5% – are sustainable, and we think they will prevail from 2014 on. We say that because there is still plenty of pent-up housing demand, particularly for younger adults who are suffering the most from the current economic malaise.

When the economy finally kicks into gear, and we expect that to occur sooner than later, more buyer demand will hit the market. Home sales volume will improve and prices will continue to appreciate.

We are not alone in our assessment. Goldman Sachs recently released a paper titled “Where is the Pent-Up Housing Demand?” that supports many of the contentions we've made over the past year: namely that lack of job growth, more than anything, is holding back the market. The paper also supports our contention that the vast majority of non-homeowners still aspire to homeownership. We are a buyer, not renter, nation.

So, no, the housing recovery hasn't stalled. We still see price appreciation, and we see substantial sales-volume increases when the long-overdue economic recovery finally arrives.

Courtesy of Jessica Regan.

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