With home prices still falling and foreclosures still flooding the market, just 65 per cent of those surveyed in CNBC’s All-America survey said they are better off owning than renting, far less than the 89 per cent who favoured owning back in 1996.
On the bright side, Americans do feel better about their home values, and that is vital given that home equity is such a key driver of consumer spending. If we feel richer, we buy more.
20-two per cent of those surveyed believe their home values will increase in the next year. That’s up from 15 per cent last quarter and the highest level in two years, albeit less than half of the 50 per cent who expected home price appreciation in March 2007, when housing was about to fall off a cliff.
50-eight per cent said they expect prices to stay flat, while 20 per cent say home prices will continue to lose value.Analysts who watch housing for a living are all over the map on this question, some predicting further price drops of up to 10 per cent, while others claim prices have bottomed.