Most Americans say it is “good time” to buy a house

by Tony Hain on October 27, 2010

What do Americans think about housing in the current climate?  Two studies offer similar results.


A Washington Post poll found that 61 percent of Americans believe it is a “good time” to buy a house. For all you political junkies, that’s true across the political spectrum: Republicans (70 percent), Democrats (61 percent) and independents (59 percent) alike. And a recent Fannie Mae study found that 70 percent of Americans say it’s a good time to buy, up from 64 percent in January.  That’s two survey’s showing the majority of Americans believe it is a good time to buy a house.


By an overwhelming majority, 78 percent, also believe home prices will either hold steady or increase over the next year, compared to 85 percent believing the same thing about rental increases, according the Fannie Mae study.


The Fannie Mae survey found that  67 percent believe housing is a safe investment, down three points since January and down 16 percentage points from a similar 2003 survey and the largest drop by far among all investment types tracked since then.  Housing ranked second behind putting money into a savings or money market account (76 percent).


There is a disconnect in both the Washington Post and Fannie Mae surveys between homeowners and renters.  Renters and delinquent borrowers were more skeptical of home ownership in the Fannie survey, and renters and those making under $30,000 were more anxious about housing costs in the Washington Post survey.  Whereas, homeowners, including those with underwater mortgages, were more optimistic in both surveys.


“Consumers are still committed to owning a home, but are showing increased cautiousness, regardless of whether they rent, own their homes outright or have a mortgage,” said Fannie Mae’s chief economist Doug Duncan. ” They are rebalancing their attitudes toward housing and homeownership by adopting a more realistic, long- term approach, and are less willing to take risks. This focus on sustainable housing is better for the economy, better for the housing market and better for America’s families.”


LOCALLY

It’s important to note that while rents are on the rise in DC, homeowners have locked in their monthly expenses. As some property tax assessments decline, homeowners may actually see their monthly costs decrease in the next year, while renters in our area see them increase. Even homeowners with adjustable rate mortgages who haven’t locked in a fixed rate may be facing a reset that is lower than their current rate.


In addition to record low interest rates (4.125% on 30 yr fixed) that are making housing more affordable, the Washington Business Journal has reported that Washington is the only large metropolitan area with unemployment under 6%–the lowest in the nation.  Local renters who have good credit are in a position to take advantage of these dynamics before everyone jumps back in and while consumer confidence keeps others on the sidelines who may later think “I wish I would’ve bought when….”



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