Few Americans Expect Home Prices to Rise Soon: Survey
Half of American homeowners do not expect their house to gain in value in the coming year although those who said the value of their property was declining appeared stable, according to a survey.
Last month, 17% of homeowners reported that their home had lost value, unchanged from the second quarter and above the 7% recorded a year ago, said Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers in a statement.
About 49% of the respondents reported gains in the values of their homes, also unchanged from the second quarter, but below the 64% recorded in July last year.
"More importantly, when asked about prospective changes in the value of their home, half of all owners reported that they didn't anticipate any appreciation in their home value during the year ahead for the fourth consecutive month," Curtin wrote.
Home price appreciation has slowed sharply during the past two years as mortgage rates have risen and first-time buyers were priced out of the market. Some data shows U.S. home prices are declining, which has contributed to a surge in defaults and foreclosures.
According to the Reuters/University of Michigan Surveys of Consumers, one-in-five home owners in the Northeast expected declines in their home values during the year ahead. This was twice that of one-in-10 in Southern home owners who anticipated falls.
"Over the past few months, home price expectations for the year ahead worsened among residents of the West and Northeast. Midwestern residents reported the weakest home price expectations for the year ahead and over the longer term," said Curtin.
Some 14% of homeowners surveyed in July said they expected house prices to fall in the year ahead, down from 16% who said this in June. In July, only about 37% expected prices to rise in the coming year.
Homeowners expect a rise of 0.2% in home values, unchanged from the forecast they gave in June, according to a median of respondents' forecasts.
Over the next five years, consumers expect home prices to rise by a median 3.1%, up from a median 2.9% they forecast in June.