Although homeowners still appear to have very little short-term confidence in the U.S. housing market, their confidence is on the rise when it comes to their five-year investment gain in their home[1]. According to a Rassmussen poll, only 20 percent of homeowners think that their home’s value will rise in the coming year, which is about the same as the last time the poll was taken. However, a full 8 percent fewer homeowners are expecting the value of their home to go down, which is a pretty significant improvement over the sentiments expressed in the last poll.
The majority of homeowners appear to be just hanging in there, with about half expecting their home’s value to remain the same. While this might appear to be positive news, it depends partly on how homeowners are reacting to these sentiments which way the housing “wind” will blow. If homeowners feel that they do not stand to gain anything in the near future by staying in a home that they already feel is draining their budget or not paying off for them, it could impact rates of strategic default in the coming months. However, given that more homeowners now believe that in five years their home values will once again be on the rise, it can be hoped that most people will do all they can to “wait out” the issues in the current housing market.
The idea that homes will be appreciating in the next five years – whether accurate or not – is an important public perception since it defines not only how homeowners behave, but also real estate investing and home buying trends. Are you thinking about buying and holding? Or are you finding that fewer people want to sell?
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[1]http://www.rasmussenreports.com/public_content/business/housing/november_2010/homeowners_still_show_little_confidence_in_short_term_housing_market
