People in the US Have a Negative Outlook for the Housing Market
According to new data from Fannie Mae, the government-owned mortgage finance company, people in the US are more disheartened regarding the expectation for the housing market than a year ago.
Hardly a handful of people guessed that home prices would go up over the next 12 months, and more people speculated buying a home was not a dependable investment, compared with the results from a similar study in January 2010.
Fannie Mae’s chief economist, Doug Duncan, said that the dispirited view was especially prominent against the setting of government policies made to assist home owners, such as loan modification programmes and low mortgage rates.
Duncan said: “Even with all of these policy solutions that have been thrown at the housing market, people’s attitudes have not improved.”
He added that the study’s conclusions indicated sustained weakness in demand for home purchases.
After growing in the first half of 2010, home prices dropped once more in the second half of the year. Most economists agree that housing is now going through a double-dip. Many analysts forecast home prices to glide down an additional 5 percent to 10 perscent in 2011.
The negativity that followed with that disappointment was showed by those Fannie Mae polled.
From the 3,407 people surveyed, 71 per cent conveyed they anticipated house costs to remain as is or slump down this year, contrary to 59 percent who believed so in January 2010.
Only 65 per cent of those who responded said that now would be the best time to purchase a house, down from 70 percent in June.
These people also expressed worries that reached out beyond housing to the broader economy; 62 per cent said the economy was on the wrong track. Primary among their concerns was a squeeze from dormant pays and growing expenses. Aboutssss six in 10 said their income had stayed on flat over the past year, while 34 percent said their disbursements were considerably higher.
The study also burrowed out changes in attitudes about home ownership. “People now think that renting is okay,” Mr Duncan said.
That is a heavy turnabout compared with recent years. From 1995 to 2005, the number of households that owned their home increased by 10.2m, while renters decreased by 1.1m, according to Fannie Mae.
Now that bandwagon is pulling in the opposite direction, boosted not just by changes in attitude but also in public policy that are meant to break the emphasis off from ownership to leasing.
For example, the Obama administration is thinking of a push to get rid of such subsidies as the mortgage tax credit that has facilitated to create unsustainable ownership levels.
In a sign of increased demand for renting, those Fannie Mae polled said they expected rents to increase this year. In the meantime, the Census Bureau reported last week that new construction of apartment buildings in January had attained the highest level in about two years.