WASHINGTON -- The U.S. housing sector is likely to experience an uneven recovery over the next five years, with some local markets bouncing back faster than others, according to a study released Wednesday.
By 2018, the median price of single-family homes will be close to the peak reached in 2006 before the national market cratered, according to the study from the Demand Institute, a nonprofit think tank operated by The Conference Board and Nielsen. But there will be winners and losers.
Among the 50 largest metropolitan areas where housing prices are expected to appreciate between 2012 and 2018, the top five will see rises on average of 32 percent, while the bottom five will average gains of only 11 percent.
The cities expected to report the largest increase in the median price of a previously owned single-family homes are Memphis, Tampa, Jacksonville, Milwaukee and St. Louis.
Those with the lowest projected price appreciation are Washington, D.C., Oklahoma City, Denver, Minneapolis and Phoenix.
"The strength of the local housing market is among the most telling metrics that helps us assess community health and well-being," said Louise Keely, chief research officer at the Demand Institute and co-author of the report.
As for states, the five likely to see the strongest gains in median prices are New Mexico, Mississippi, Maine, Illinois and New Hampshire.
Those with the lowest are Minnesota, Virginia, New York and Alaska. The study includes Washington, D.C., on its list.
The report is based on an 18-month research program that included an analysis of 2,200 cities and towns in the United States and interviews with 10,000 consumers.
Markets that experienced the biggest run up in prices during the bubble -- and subsequently the deepest drops -- have a much longer road ahead to regain their prior peaks, the study found.
For instance, in Nevada, prices will likely be 45 percent below their 2006 peak by 2018, in line with their 2002 level, the study said. Nevada was among the states that experienced the largest price appreciations during the boom and the hardest fall. Property values plunged 60 percent from peak to trough.
The study predicted that the national median price for an existing single-family home will rise at a much slower rate in the coming years than in 2013, when prices advanced 11.5 percent. The study sees prices growing at an annual rate of 2.1 percent between 2015 and 2018, as supply and demand begin to even out.
The double-digit price increases of the past two years are not indicative of future trends since they were largely driven by investors snapping up distressed homes to meet surging rental demand, the study said.
In contrast, it predicted that the main driver of demand in the next five years will be the formation of new households.
As the U.S. economy strengthens and employment rises, potential buyers will find entry into the market is easier.
Still, it is unlikely that everyone who dreams of owning a home will be able to make it a reality. In the next five years, the group predicted about 4 million households will fail to realize their current purchasing or even rental aspirations.