Polls Show Consumers Think It's a Good Time to Buy a House

The Missouri Association of Realtors released the following news yesterday. It's a good sign, and in my experiences over the past several months, it is spot on.

Finally, good news from a news source! CNBC just publicized a recent Reuters/Zogby poll indicating that confidence in homebuying is rather high for the majority of Americans. Results of a poll conducted on April 10 – 12 surveying a cross-section of some 1,049 of the nation’s likely voters showed that 53.8 percent thought this is a good time to buy even though 71 percent thought the nation is currently in a recession. A similar poll, recently conducted by Associated Press-AOL Money & Finance indicated that fifty nine percent think now is a good time to buy.

With prices in most parts of the nation down significantly from last year, and interest rates near a 45-year low, the facts seem obvious—at least to those of us working in this profession. However, until recently, consumer confidence in housing has been at an all-time low. This survey is encouraging because it shows that the confidence level among average consumers is beginning to rise.

Supporting figures from the Mortgage Bankers Association indicate that mortgage applications rose 2.5 percent during the first two weeks in April, and that rates for both fixed and adjustable-rate mortgages declined slightly during the same period. The April 16 edition of the online REALTOR® magazine also carried a Reuters News report quoting real estate practitioners in Phoenix, Tucson, Las Vegas and Orange County Calif. saying their sales volume had doubled in March over February. March also brought a turnaround in the Orlando, Fla. Housing market, with a month-over-month increase in the number of home sales, an increase in the number of pending sales contracts, and a decrease in the amount of inventory. Agents in New York and Washington D.C. also reported increased volume. These are all markets that had been reporting month-over-month declines.

And it all makes sense. While underwriting standards have tightened, credit-worthy buyers are still able to qualify—and at reasonable rates. Since most economists are predicting an upturn in prices over the next 12 months, buyers who jump into the market now will likely find this one of the best investment opportunities available today—particularly considering that the return on investment through appreciation is tax-free up to a capital gain of $500,000 for most married couples. In a recent Bankrate.com article, William Chu, a senior mortgage loan consultant at American Chartered Bank, suggests that it’s a particularly good time to look at the higher-end properties if you can afford them, because with the pool of buyers shrinking, upper-market sellers are lowering their prices to attract a large pool.

And don’t let the nay-sayers have the last word! Standard & Poor tracking shows home prices down 7.7 percent nationally in November 2007. But that’s after a nearly 10-year period where average prices were up by that much or more every year. Those who jumped into the market just to flip homes to make a profit got stung when the downturn hit. So did those who followed the siren song of lenders who ignored sound qualifying standards or made loans at 100 or even 110 percent of value.

Historically, owning a home has been the best possible investment available to most Americans—and it still is today.

Spread the word!

Are you a renter that hasn't jumped off the fence yet? Are you interested in buying but have concerns? If so, drop me an email or give me a call and let's talk!