Although a press release last week about a Gallup survey showed Americans view real estate as a better long term investment than stocks, gold, savings accounts, or bonds, another report from the company indicates they are less enthusiastic about buying a home.
Gallup said today that 69 percent of Americans responding to their survey said it was a good time to buy a home while 74 percent thought this in both 2013 and 2014 surveys. The current number is similar to that measured by Gallup from 2009 to 2012 and showed a more positive attitude toward buying than between 2006 when home values stopped rising and interest rates increased and 2008, after the housing bubble burst. During that period only 50 percent thought it was a good time to buy.
The survey results were gathered through Gallup's annual Economy and Personal Finance survey, conducted April 9-12. The company said the less positive views of home buying may have been influenced by lackluster and probably bad-weather related home sales earlier this year, The newest data on home sales, released last week, showed a surge in existing home sales in March. While the size of the universe differs very slightly, it appears that this is the same audience and survey that provided responses for the earlier Gallup report about the investment potential of real estate.
Since 1978, Americans have generally been optimistic about the home-buying climate, with majorities saying it is a good time to buy even in times when the economy struggles, including after the housing bubble burst. Thus, the measure likely reflects the value Americans put on homeownership in addition to their views of the prevailing housing market.
Gallup noted that positive responses to the question about homebuying dropped the most in the current survey among respondents residing in the Western part of the country, with 64% viewing it as a good time to buy, down from an average 75%. There were smaller drops among those living in the East and South, while views in the Midwest are steady if not up slightly.
Despite the decline in positive attitudes toward homebuying the majority of respondents, 59 percent, expect prices in their local areas to rise while 29 percent expect no change and 11 percent anticipate a decrease in value. This was the highest percentage expecting an increase since 2006 when 60 percent did.
Seventy-six percent of those living in the West expect price increases which, Gallup said, may explain why fewer Westerns think it is a good time to buy. Southern residents are the next-most optimistic about local home prices, with 61% expecting an increase, followed by those living in the Midwest (51%) and East (46%).
Gallup concludes that Americans remain generally positive about the housing market, although they are slightly less inclined right now to believe buying a home is a good idea than they were during the past two years, possibly because expectations for higher prices may also push them to conclude it is now more of a sellers' than a buyers' market. It is also unclear to what extent the recent news aboutb surging U.S. home sales may cause Americans to become a bit more positive about home buying conditions. "Mortgage interest rates remain low, and higher consumer confidence than in recent years works in favor of continued strong home sales, particularly if the slump in sales earlier this year was mainly because of unusual weather conditions," the Gallup release said.
The flip side is that a stronger economy has also moved the Federal Reserve to consider raising interest rates which could make financing a home more expensive and dampen the housing market in the coming year.
Results for this Gallup poll are based on telephone interviews conducted April 9-12, 2015, with a random sample of 1,017 adults. The survey had a quota of 50 percent cellphone respondents and 50 percent landline users and had additional quotas by time zone.
