WASHINGTON (Reuters) - Although existing homes are selling at their slowest pace in four years, most Americans are confident their homes are worth more now than they were a year ago, according to a survey released on Thursday.
A poll conducted by the Boston Consulting Group found that 55 percent of Americans believe their house would sell for more money now than last year, compared with 59 percent who felt the same way last summer. Eighty-five percent expect their home to be worth even more in five years than it is now.
“It’s a reasonable expectation. Markets neither boom nor bust forever,” said David Berson, the chief economist with mortgage finance company Fannie Mae. “We’re in a down period now, and I don’t think it’s going to end any time soon, but it will end long before five years is up.”
Homeowners remain optimistic even though existing home sales last month hit their lowest rate since June 2003.
National surveys of home prices seem to bear out at least a degree of optimism, showing prices still rising, if only slowly.
According to the Office of Federal Housing Enterprise Oversight, the average U.S. home price rose 4.3 percent over the year ended in the first quarter, the smallest gain in nearly a decade.
While record rates of homes entering foreclosures and weak sales figures have troubled analysts, 63 percent of the 1,007 homeowners surveyed still see real estate as a solid investment.
The softening housing market also appears to have had little impact on spending behavior. Seventy-six percent of participants in the nationwide telephone survey say it hasn’t affected their spending at all.
“Talk of declining average values of homes is not forcing a cutback in spending,” Michael Silverstein, senior partner at Boston Consulting, said in a statement. “It’s just not translated into the American psyche.”
Still, the survey, which was conducted between May 31 and June 3, showed concern among nearly half the participants that declining housing prices are hurting the national economy.
Most predict the slump will last two years. Even so, 69 percent of homeowners interviewed anticipate renovating their nest-egg in the next year.