Realty.com

And Now Time for Some Good News

Posted January 8, 2010 by Matthew Denton

A new survey reveals renewed optimism among American homeowners.

Reuters and the University of Michigan recently announced a different wave of outlook among American Homeowners. The report states, “The proportion of homeowners that expected declines in the value of their homes in the year ahead fell to 15 percent in January, the lowest level since early 2007. That is down from 16 percent in the fourth quarter, and sentiment has improved over the past year. In the first quarter of 2009, 26 percent expected their home value to decline.
The mean anticipated annual gain over the next five years held steady at 2.7 percent in January. Given consumers’ long-term inflation expectations, a zero, inflation-adjusted gain was expected. Last month, 46 percent said their homes decreased in value during the past year, while 14 percent said they increased.”

The survey reflects a renewed interest as proven by the latest Case-Shiller Home Price Index . Home values are slowly showing signs of a rebound with the 20-Composite Index further improving its performance last November with only a 5.0 percent YoY decline. Standard and Poor’s even admits that there’s an observed moderate pace of improvement in housing prices. However, we doubt that majority of those who were surveyed come from Las Vegas and Tampa since the reduction in home values in these two cities are still in double digits.

So how come U.S. homeowners have revitalized confidence this first quarter?

First, data such as S&P’s Case-Shiller Home Price Index influence the homeowners’ points-of-view. Numbers speak a lot even in a dire economic period.

Second, mortgage rates have become more affordable, partly supported by artificial market influences spurred by the government.

Third, the job market is starting to pick up from 10 percent to 9.7 percent last month. This decline in joblessness is an indication that among those surveyed homeowners by Reuters, they have either found a job or are more eager to try their luck in the job market.

Let’s consider this optimism a welcome sign of things to come even if selling conditions don’t usually follow such positivity.

Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.