For the first time in 18 months, home prices in the 53 cities surveyed by the RE/MAX National Housing Report in February rose by 1.1 percent over February 2011. As an early spring drew buyers to market, home sales were even higher, up 8.7 percent from one year ago. Attitudesd towards homeownership also improved 8 percent, according to a new survey by Prudential.
As a result of reduced foreclosure activity and positive sales of eight straight months above the previous year, inventory continued a downward trend for the 20thstraight month, 22.4 percent lower than the housing inventory in February 2011.
Consumer sentiment appears to be rising, and record low mortgage rates coupled with favorable home prices are attracting homebuyers and investors who don’t want to miss a historic opportunity.
“All the data is pointing to a very active spring and summer selling season this year, which is great news for a recovering housing market,” said Margaret Kelly, CEO of RE/MAX, LLC. “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting.”
Rising optimism over homeownership may in part account for the improving sales picture, according to a a new national survey showing that Americans are significantly more optimistic about homeownership than they were a year ago. According to the second-annual Prudential Real Estate Outlook Survey, a full 60 percent of Americans have favorable views toward the real estate market. That’s up 8 percentage points since last year.
Some 70 percent of respondents have some degree of confidence that property values will improve over the next two years; 63 percent believe that real estate is a good investment despite the recent market volatility; up 11 points from last year. Eight in 10 respondents said homeownership is very important to them; only 15 percent said the economic downturn made homeownership less important.
“Respondents told us what our sales professionals see every day that, despite recent market volatility, homeownership remains integral to the dreams of most Americans and that consumers’ confidence in the housing market is returning,” said Earl Lee, president, Prudential Real Estate. “This is good news for home buyers and sellers, communities and our economy as a whole. As more people look to take advantage of historic interest rates and prices, we believe the foundation for a sustainable recovery is in sight.”
Among the generations, 94 percent of respondents believe that finding the right home and community are crucial to helping their family be happy. Only a small minority of older Americans said the recent housing crisis made homeownership less important to them. Nearly half of Gen Y respondents said it made homeownership more important. Gen Y’ers are particularly optimistic about the road ahead with 72% expressing favorable views about the residential real estate market.
“Characteristically, many of these consumers, particularly Gen Y, share a firm sense of family and community,” Lee said. “It’s not surprising now that they’re embracing homeownership to build on that sense.”