Home Prices May 10, 2013

Optimism over home prices reaches milestone

A majority of Americans now expect home prices to increase over the next year, pointing to growing optimism among housing-market observers, according to the results of Fannie Mae’s April 2012 National Housing Survey.

By comparison, in April of last year only 32 percent of those surveyed said they believed home prices would appreciate over the next year. In April, the three percentage point increase in the share of Americans who believe prices will increase was enough to push the total share of those bullish on home prices to 51 percent, Fannie Mae said.

“For the first time in the survey’s three-year history, the majority of Americans surveyed now expect home prices to increase,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country. Reflecting that increased optimism toward housing, the share of Americans who think it is a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again.”

As buyers continue to bid up prices in many markets suffering from a shortage of inventory, the share of Americans who believe now is a good time to sell continued to climb in April, according to the survey. That share of respondents rose by four percentage points in April to 30 percent, exactly double the share recorded last year.

Other results of April’s survey appear to highlight growing optimism among Americans in the larger economy as well. They include:

  • The share of respondents who say the economy is on the right track increased 4 percentage points over March to 39 percent.
  • The percentage of people who expect their personal financial situation to get worse over the next 12 months dropped by five percentage points to 16 percent.
  • Eleven percent reported significantly lower household expenses compared to 12 months ago, a three percentage point increase over March.

– See more at: http://www.inman.com/2013/05/07/optimism-over-home-prices-reaches-milestone/#sthash.aYAgiAB4.dpuf