Even as consumer confidence in the economy as a whole brightens, hopes for a housing recovery are growing increasingly gloomy.
The latest Rasmussen Reports national telephone survey, conducted November 27-28, found that 71 percent of American adults now believe it will take at least three years for housing prices to recover. That figure includes 20 percent who think it will take three years and 51 percent who expect it will take even longer.
In October, Rasmussen reported that homeowners were slightly less pessimistic about the short-term and long-term value of their homes than they had been in recent months but were still less confident than they were two years ago. The October 18 Rasmussen Reports national telephone survey of U.S. homeowners found that just 16 percent believe their home’s value will go up over the next year. That’s up slightly from 13 percent in September and August and is the highest level of confidence since June. Still, this finding was above 20 percent for much of 2009.
The latest Fannie Mae consumer survey also found that consumer expectations for a near term housing recovery continue be bleak. Just 19 percent of respondents expect home prices to increase over the next 12 months , while 23 percent say they expect home prices to decline (down by 2 percentage points since last month). Fifty-five percent say prices will stay the same, tying the all-time high number set last month.
Compared to consumers, experts are even more pessimistic. The most recent MacroMarkets home price expectations survey of 111 housing economists and experts found that experts believe home prices will grow at a mere 1.1 percent nominal average annual rate through 2015, far from what is needed to regain the value lost since prices peaked in 2006 or even to return to the pre-boom annual growth rate of 3.6 percent.
The increased consumer pessimism over housing comes as consumer sentiment about the economy as a whole is improving. Consumer sentiment rebounded in November from a 2-1/2-year low last month and U.S. retailers reported strong sales as the holiday shopping season got off to a positive start last week.
The Conference Board’s index of consumer attitudes jumped to 56.0 in November from 40.9 in October, hitting the highest level since July and handily topping economists’ forecasts for 44.0. However, the confidence index remains historically low and is well below its most recent high of 72.0 in February.