Pessimism Amongst US Homeowners Rising
According to a recent Rasmussen Reports national telephone survey, just 39% of US homeowners expect that the value of their homes will rise over the next five years.
According to Rasmussen Reports, this is the lowest level of confidence in the US real estate market that has been measured by the company since they started conducting the survey. In April of 2009, the same survey revealed that 55% of US homeowners believed that their home would rise in value over the next five years.
Many Americans are clearly expecting that the US real estate market will stagnate over the coming years. According to the survey, 18% believe that their home will drop in value over the next five years, while 37% believe that there will be little change.
Over the short-term, 15% of homeowners believe that their home will rise in value over the next 12 months, while 33% believe that their homes will drop in value.
The survey also revealed that men are slightly more confident about the real estate market than women. 45% of men that were surveyed in the poll believe that their home will rise in value over the next five years, while just 33% of women share the same sense of optimism.
So why are homeowners pessimistic regarding the future value of their homes?
There are multiple reasons, including:
-massive supply in the market, mainly due to large numbers of foreclosures
-high unemployment rate
-worries over higher interest rates in the future (according to Rasmussen Reports, 54% of Americans believe that there will be higher interest rates in 12 months)
-many buyers are afraid to purchase a home because they are worried that prices will continue to drop after they buy. This has led many willing buyers to be afraid to pull the trigger on a purchase
-expiration of homebuyer tax credits
It's been nearly five years since the US real estate market reached its peak. Since then, average home values in the country have been smashed, so it's easy to understand why people would be so pessimistic.
Source: Rasmussenreports.com - Only 39% Now Expect Improved Home Values in Five Years
Filed under: Real Estate News