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Homeowners are optimistic amid mixed signals

Aug 1 2011 4:16PM

A recent survey conducted by the Home Buying Institute showed that homebuyers expected marked improvements in home prices over the next few years.

The summer survey asked 25,000 consumers how they felt about the value of their homes, and an overwhelming 69 percent stated that they expected their home price to rise in the next 24 months. Some of this optimism could be due to a brighter Standard & Poor’s Case/Shiller Home Price Index, according to HBI.

The most current S&P Home Index stated that home prices had risen for the second consecutive month in several cities.

“This is a seasonal period of stronger demand for houses, so monthly price increases are to be expected and were seen in 16 of the 20 cities,” explained Index Committee chairman David Blitzer.

However, an abundance of foreclosure and shadow properties could curb rising home values, according to HBI. The vast number of bank-owned properties may continue to drag home prices down, as demand lags behind inventory in many regions.

Unsteady unemployment rates and increased difficulty qualifying for mortgages may also work against these positive housing market indicators, the source reports.