Housing Bubble Didn't Faze Desire for Buying Homes
If you thought that the worst housing market collapse in 80 years would make Americans much less comfortable with buying a home as an investment, then you would be wrong. A new Rasmussen poll shows that most Americans still view a house as a great investment. This sort of news must really upset those who believe a house isn't an investment to begin with.
In fact, a whopping 59% of Americans think buying a home is the "best investment a family can make." 21% disagreed, while another 21% were unsure. Even if a home is an investment, there's no guarantee that it will be a very good one. House appreciation doesn't always occur, even in good economic times.
What makes this statistic surprising is that it's changed very little since the financial crisis. Back in September 2008, it was only 7% higher, according to Rasmussen. Since then, houses in the U.S. have broadly experienced price declines. Many homeowners faced foreclosure. Yet, Americans still largely believe buying a home the best investment they can make.
In that context, however, Rasmussen also found that just 15% of Americans think it's a good time for someone in their area to sell a house. 68% disagreed, and 17% were undecided. Of course, they're right: the housing market continues to have a huge amount of inventory, as foreclosure hit a new record high in March. As long as inventory grows, it will be a buyer's market.
This may appear to fly in the face of February's seemingly good news that home prices experienced their first year-over-year increase since December 2006, according to the S&P/Case-Shiller Index (.pdf). Yet, that increase wasn't particularly impressive, considering it was due more to prices decreasing by more from January 2009 to February 2009 (-1.5%), than from January 2010 to February 2010 (-0.1%). It's hard to celebrate a year-over-year price increase, when it's in the context of month-over-month a price decline. As the home buyer credit ends this month, and demand evaporates, prices could suffer further. If interest rates go up, that will make matters worse for sale prices as well.