From Gallup:
More in US Expect Local Home Values to Rise
Sixty-one percent of U.S. adults predict housing prices in their local area will increase in the next 12 months, up from 55% a year ago and the highest Gallup has measured since 2005.
Americans’ optimism about home values continues to recover from where it was after the housing bust and recession. Between 2008 and 2012, only as many as one-third of Americans, including a low of 22% in 2009, believed local housing prices would increase.
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%.
The high point in Gallup’s trend was 70% in 2005, the first year it asked the question and shortly before U.S. home values hit their peak.
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.
In addition to the 61% currently expecting local housing prices to rise, 28% predict they will stay the same and 10% say they will decrease.
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Americans — both those who own a home and those who do not — appear to be cognizant of trends in home prices. With U.S. home values showing consistent increases over the past five years after several years of decline, Americans expect local home prices to continue to rise. While Americans’ optimism is not yet back to where it was during the housing boom in the mid-2000s, it is now the closest it has been since the housing bubble burst in 2007.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. Still, if housing prices continue to rise and interest rates increase, the potential for a new housing bubble will grow.