Homeowners Bullish on Home Prices?
NEW YORK (MainStreet) -- Are U.S. homeowners wearing rose-colored glasses? Or do they know something that a lot of economists don't? That's the question to ask after a new report out shows homeowners believe U.S. home prices will go up over the next year.
The U.S housing market had already received some good news this week, as Transunion reported that the U.S. residential home mortgage delinquency rate (defined as the number of home mortgages more than 60 days past due) fell for the first quarter of 2012 to 5.78%.
The two previous quarters had seen a rise in such delinquencies, but the good news in the first quarter leaves mortgage delinquencies at their lowest levels since the first quarter of 2009, when the U.S. economy was mired in a deep recession.
"To see that quarter over quarter, and year over year, more homeowners were able to make their mortgage payments is certainly welcome news," notes Tim Martin, group vice president of U.S. Housing at TransUnion. "Before this, we saw two quarters of delinquency increases and while we are still about three-times above the pre-recession norm, this should mark the start of consistent improvement each quarter."
TransUnion also sees a "modest" improvement in home prices, an estimate shared by U.S. homeowners themselves these days.
In a separate study by Fannie Mae -- its most recent National Housing Survey -- homeowner sentiment on home prices, and their ability to sell their homes, are both on an upward path.
"This month's survey shows a continued gradual improvement in consumer sentiment and outlook for home prices," offers Doug Duncan, vice president and chief economist of Fannie Mae, in a statement. "After flatlining at depressed levels for over a year, a growing share of consumers indicate that it is a good time to sell, suggesting rising optimism for the housing market."
Duncan says that to sustain rising homeowner sentiment the U.S. employment situation has to improve, no sure thing given last Friday's generally disappointing jobs number, which saw the economy create a tepid 115,000 new jobs in April.
"Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations," he adds. "Friday's report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year."