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The number of Americans that expect home prices to rise is now at its highest level since before the housing crisis 10 years ago. And while the majority of Americans believe that now is a good time to invest in a home, fewer own a home than they did a decade ago, according to a new Gallup poll on housing sentiment.
The newly released data revealed that 61 percent of respondents expected home values to increase in the next 12 months, up 55 percent from last year. This was also the highest percentage measure by Gallup since 2005, when it hit 70 percent — the first year Gallup posed the question of where home values are headed.
Americans’ sentiment about housing has been improving as both the housing industry and economy continue to recover from the Great Recession. According to Gallup, between 2008 and 2012, only about an average of 34 percent of respondents believed housing prices would rise, with a low of 22 percent in 2009. However by 2013, with both housing and the economy in recovery, the percentage expecting housing values to rise went up past 60 percent, says Gallup.
Gallup says these expectations mirror home values over the last decade, with declines between 2007 and 2011, and increases starting in 2012.
Despite the overwhelming belief that home prices will again increase, 67 percent say it is still a good time to buy a home, while 30 percent felt it was a bad time to buy. These figures remain largely unchanged from the previous two years, but are below those measured from 2012 to 2014, when at least 70 percent of respondents felt it was a good time to buy a home.
And although more Americans feel owning a home is a good investment, fewer own now than 10 years ago. Between 2004 and 2007, before the housing crash, an average of 72 percent of Americans reported owning a home. Since 2015, the percentage has been an average of 61 percent, according to Gallup.
“The continued increase in housing prices leads to questions of whether another housing bubble could occur. While prices now are nearly where they were a decade ago, houses are more affordable because of lower interest rates, and banks are more reluctant to issue risky mortgages than they were before the mid-2000s housing market crash,” says Gallup.
However, there is still potential for a new housing bubble to develop as prices continue to rise along with interest rates, Gallup added.
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