Confidence in Rising Home Prices Tops 50%
May 14, 2013Confidence in the housing industry passed a milestone recently, with more than half of all Americans now expecting home prices to rise within the next year. An April housing survey by the mortgage agency Fannie Mae found that 51 percent expect home prices to climb at least 3 percent. A year earlier, only 32 percent of those surveyed were optimistic prices would rise. “Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country,” said Fannie Mae chief economist Doug Duncan, in a statement accompanying the survey. That optimism is borne out in the Bay Area, where double-digit increases in home values have become the norm and economists say the region’s strong economy will support further increases for years to come. Pacific Union’s April Real Estate Update noted that the median price for single-family homes reached $1 million in San Francisco for the first time in more than five years and the median price in our Sonoma Valley region jumped 65 percent over the past year. In another encouraging sign from Fannie Mae’s survey, the share of respondents who said now is a good time to sell has doubled over the past year, climbing to 30 percent last month. Americans’ increasing optimism toward the selling market may bode well for continued improvement in housing activity, Fannie Mae said, as recent market data suggest that five out of eight people who buy a home first have to sell one. “Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again,” Duncan said. Other highlights from Fannie Mae’s survey:
- Those who believe home prices will go down over the next year held steady at a record low of 10 percent for the fourth month in a row.
- The share of respondents who said mortgage rates will go up fell 3 percentage points to 43 percent, while those who say they will go down increased slightly to 7 percent.
- Those who said they would buy if they were going to move increased slightly to 65 percent.
- At 39 percent, the share of respondents who say the economy is on the right track increased 4 percentage points over March.
- Those who said their household income is significantly higher than it was 12 months ago held steady at 20 percent.