Optimism on the Horizon
by: Tim McLaughlin, Weichert Financial
Last week, Fannie Mae released their National Housing Survey for 4Q10. This comprehensive report and survey showed that the majority of Americans surveyed were upbeat and optimistic about the housing sector as compared to where we were 12 to 24 months ago.
The survey showed that Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though there are some lingering concerns about the acceleration of the economy. If fact, over three-quarters of the respondents (78 percent) believe housing prices will hold steady or increase over the next twelve months.
Younger Americans are generally more positive about owning a home than the general population. 59 percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment.
As stated above, 26% of the general population thinks housing prices will increase over the next 12 months, with an additional 52% thinking that housing prices will remain about the same.
On average, members of the survey anticipate home prices to increase 0.4% over the next 12 months, while the same subset expects rental prices to increase 2.8% over the same time period. The expectation that rental increases will far outpace home price increases was prevalent with surveyors over the next five years, in fact.
One in four Americans said they would probably buy a home in the next three years (both current homeowners and non-homeowners), and one in three Hispanics and African Americans were of this thought process.
One interesting (and probably obvious) fact: poor credit is the number one stumbling block keeping potential borrowers from owning a home.