Fifty-five percent of Americans say they expect home values to rise over the next 12 months, further showing that consumers are becoming less fearful about jumping back into the real estate game, according to Bankrate’s latest monthly Financial Security Index. Nine percent of Americans say they think prices will fall, and 27 percent believe values will stay flat.
“It appears that Americans’ love affair with real estate is back,” says Greg McBride, senior financial analyst for Bankrate.com. “Even though the housing bust shows that housing prices don’t just go straight up, people just don’t have the same risk aversion to real estate and home ownership that they do to stock ownership.”
Bankrate’s July index showed that Americans prefer real estate over stocks as a way to invest money they don’t need for 10 years. The decrease in foreclosures and still-low mortgage rates have been two factors helping home values to recover, says William Delwiche, an investment strategist for Robert W. Baird & Co.
“We got past that wave of the foreclosure crisis and banks trying to dump all their homes on the market,” Delwiche says. “Lower mortgage rates have had an undeniably positive effect on not just household balance sheets, but also the housing market generally. It makes it much easier to buy a house if you’re so inclined.”
Source: “Survey: Americans upbeat about home prices,” Bankrate.com (Sept. 2013)