Home price appreciation patterns across the country continue to support incessant housing market improvement expectations during 2013.

Data reinforce the view that said improvements are primarily driven by investors, note Keefe, Bruyette & Woods Inc. analysts in a housing industry update.

In their view current price gains are “just the beginning of a multiyear self-reinforcing trend.”

While skeptics have labeled the phenomena as an artificial, short-lived occurrence because “in large part” price gains were driven by high investor purchases and artificially suppressed mortgage rates, data do not support such concerns.

Seasonally adjusted home price data reported by the S&P Case-Shiller index show prices for the 10-city and 20-city index increased year-over-year by 7.3% and 8.1%, respectively.

And investors represent a significantly large buyer group among all-cash buyers whom account for nearly one third of all home sales.

Lower-tier homes continue to lead the home sales improvement trend increasing by an average of 2.1% compared to the previous month and 16.5% annually, while sales of higher tier homes increased up 0.9% monthly and 7.6% annually.

The hottest markets remain some of the hardest-hit areas during the downturn where lower-tier home prices remain at least 50% below bubble-era peaks.

For example, in Atlanta, Las Vegas and Phoenix, prices for lower-tier homes increased 13.3%, 8.7% and 8.2%, respectively, over the past three months.

These findings suggest “housing and its economic knock-on effects” remain bullish, analysts conclude, if improving job growth, recovering housing wealth and other market changes are factored into the equation, improvements “will last.”

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