The Arkansas REALTORS® Association released its monthly housing report last week showing that while home prices in Arkansas are still sluggish, January was a solid month for home sales. In January Arkansas home sales saw a 13 percent increase in the number of Arkansas homes sold as compared with the same period last year – a time when the market was seeing a boost from the First-Time Homebuyer’s Tax Credit. The report also showed that the average price of an Arkansas home increased by more than 2.5 percent in January to $143,030.
Arkansas REALTORS® Association President Andy Meyers said that thenumbers are reflective of growing consumer confidence. “Sales occurring in January are reflective of purchase decisions being made during the holiday season and, when considered without the incentive of the home buyer tax credits, indicates that Arkansas consumers are becoming confident again.”
According to a recent national housing survey by Fannie Mae, Meyers is absolutely right. The Fannie Mae Fourth Quarter National Housing Survey, conducted between October 2010 and December 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.
According to the survey, Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy:
- Seventy-eight percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010;
- But almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.
“Over the course of the last year, we gained deeper insights into Americans’ confidence in the strength of the housing market and the economic recovery,” said Doug Duncan, Vice President and Chief Economist of Fannie Mae. “More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”
Other Survey Highlights
Younger Americans, Hispanics, and African-Americans are generally more positive about owning a home than the general population. Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis — from nearly forty-four percent when home prices peaked to under forty percent in 2009.
More than one-third of Hispanics (34%) and African Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.
The percentage of Americans who believe that buying a home is a safe investment declined to 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment.
During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74%) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.
One out of three delinquent borrowers continues to say they have considered defaulting on their mortgage. However, that number fell from 39 percent at the beginning of the year to 31 percent in the fourth quarter. The number of delinquent borrowers who say they have seriously considered defaulting also has declined, from 25 percent in January 2010 to 19 percent.
For more detailed findings from the survey, visit http://www.fanniemae.com/media/survey/index.jhtml. To subscribe to the Arkansas REALTORS® Association’s Monthly Housing Reports readers can email me at Questions@ArkansasRealtors.com.
House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas REALTORS® Association.