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More Americans predict continued rise in home prices: poll

Xinhua, April 24, 2017 Adjust font size:

Sixty-one percent of U.S. adults predict housing prices in their local area will increase in the next 12 months, up from 55 percent a year ago and the highest measure since 2005, found a Gallup poll released Monday.

Americans' optimism about home values continues to recover from where it was after the U.S. economy took a nose dive in 2007-2008 and the housing market plummeted.

Between 2008 and 2012, only as many as one-third of Americans, including a low of 22 percent in 2009, believed local housing prices would increase, Gallup said.

By 2013, a majority again held this view for the first time since 2007. This year, the percentage expecting housing-value gains pushed past 60 percent, Gallup said.

The high point in Gallup's trend was 70 percent in 2005, the first year it asked the question and shortly before U.S. home values hit their peak, Gallup said.

These expectations largely mirror what has happened to U.S. home values over the past 10 years, with declines between 2007 and 2011, and increases beginning in 2012 and continuing since then, according to Gallup.

In addition to the 61 percent of Americans currently expecting local housing prices to rise, 28 percent predict they will stay the same and 10 percent say they will decrease, Gallup found.

Home-value expectations vary by region, with nearly three-quarters of those in the West predicting increases, compared with slightly more than half of Midwestern and Eastern residents.

In 2016, some of the largest increases in home values occurred in the Western United States, Gallup said.

Sixty-seven percent of Americans believe now is a good time to buy a house and 30 percent say it is a bad time. Those figures are similar to what Gallup measured in the previous two years but are down slightly from 2012-2014, when a whopping 70 percent thought it was a good time to buy a house, Gallup said.

Americans continue to widely endorse homeownership even though fewer now own a home than in the past. From 2004 through 2007 -- before the housing crash -- an average of 72 percent of U.S. adults reported owning a house. Since 2015, the average is 61 percent.

Still, the continued increase in housing prices leads to questions of whether another housing bubble could occur. If housing prices continue to rise and interest rates increase, the potential for a new housing bubble will grow, Gallup said. Endit