By Stephen Nakrosis 
 

A shortage of both new and existing homes for sale is driving home prices, and the existing supply of homes is expected to stay low, BBVA Research said Wednesday.

Although the second half of 2018 saw housing market activity slow, price appreciation remained solid, rising 5.1% year-over-year, the BBVA report said. Demographic trends will continue to support housing demand.

"The attractiveness of large coastal areas will remain," BBVA said, adding "the lack of affordable housing will drive some residents to smaller metropolitan areas away from the coasts."

Apartments will remain in high demand in desirable areas, the report said, and higher interest rates will keep some from selling their homes and relocating.

Small metropolitan regions and rural areas will continue to struggle to find residents, it said.

BBVA is an international financial company based in Spain. Its BBVA Compass subsidiary operates banks across the southern area of the U.S.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

January 16, 2019 12:49 ET (17:49 GMT)

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