Despite the fact that home price appreciation is moderating, with some areas of the country now witnessing month-over-month price declines, more than half of Americans believe home prices will go up over the next 12 months, according to Bankrate.com.
In September last year, 55% of Americans believed home prices would go up during the next year, while 9% believed they would decline.
This year, only 53% think home prices will rise, while 8% think they will decline. The results of the survey, which was conducted by Princeton Survey Research Associates International, were consistent across gender, age, income and education levels.
‘Housing, like the stock market, is something consumers look to as an indicator for whether things are headed in the right direction,’ says Greg McBride, chief financial analyst for Bankrate.com, in a statement. ‘When home prices fall, everyone gets a little queasy – homeowners and renters alike. The expectation of continued home price increases underscores an expectation for continued improvement in the job market, household finances and the overall economy.’
Recent home price index (HPI) reports show that the rate of appreciation has been slowing across most of the country in recent months – and that the days of double-digit year-over-year increases are behind us for now.
This week, the Federal Housing Finance Agency released its monthly HPI, showing that U.S. home prices rose 0.1% on a seasonally adjusted basis in July compared to June and were up 4.4% compared to July 2013.
And last week, valuations technology provider FNC reported that home prices inched up 0.6% in July compared to June and were 7.4% higher compared to July 2013.
It should be noted that different HPI reports use different methodologies.