Most Americans See Home Prices Stable or RisingMay 10, 2010
Taken from Gallup
by Dennis Jacobe, Ph.D
Lower but stabilizing home prices combined with continued low mortgage rates have persuaded 72% of Americans that now s a “good time” to buy a house- essentially the same percentage as a year ago, but up 19 points from 2008.
Better Price Expectations
More importantly, Americans’ expectations about housing prices have improved markedly from last year-potentially encouraging prospective buyers to take advantage of the current home buying opportunity, and thereby making it easy for homeowners to sell. Thirty- four percent of Americans expects the average price of houses in their area to increase over the next year- up 12 points from last year, and the highest such expectations in Gallup’s monitoring since June 2007.
When this is combined with the 43% expecting home prices to stay the same, a total of 77% of Americans see housing values in their area stabilizing or moving higher during the year ahead. To the degree that potential homebuyers agree, this should significantly reduce their fear that the homes they buy could decline in value shortly after purchase.
Expectations for housing prices are best in the East and West, followed closely by the South; they are poorest in the Midwest.
Americans’ recognition that now is a good time to buy a house is good news not only everyone associated with the real estate business but also for the economy overall. Even better, it appears that in many local real estate markets, housing price expectations are for stable or increasing price over the next 12 months, giving prospective homebuyers in theses areas another reason to buy now. Further, mortgage money from the federal government continues to be available at historically low rates, although today’s underwriting standards are more stringent than those during the housing boom.
While the overhand of foreclosures and distress sales continue to depress in some areas, the basic problem facing housing in 2010-2011 is the same as that challenging the overall economy: jobs. Buying a home is the most important purchase and the largest financial commitment most people make during their lives. For most American, it is hard to feel financially secure enough to make such a commitment in an economy in which 20% of the US workforce is underemployed.