Most Americans believe local home prices will continue to rise during the next year as the country moves on from the worst effects of the COVID-19 pandemic, according to a new Gallup poll.
A total of 71% of U.S. adults predicted the average price of houses in their area will increase, according to a Gallup poll conducted April 1-21.
Those results were drastically different from a year earlier, when just 40% predicted an increase in home values amid mounting economic uncertainty at the beginning of the coronavirus pandemic.
Gallup also found 53% said it is a good time to buy a house, barely improved from last year's record-low 50%.
Although home values have risen to historical highs, the supply of available homes has not kept up with demand. However, the number of home sales has declined in recent months.
Gallup determined housing market activity in the coming months will be more telling, as spring and summer represent the usual peak homebuying season.
The current 71% saying home prices will rise is the highest total in Gallup's trend, though not statistically different from 70% in 2005, when there was a rapidly emerging housing bubble that eventually burst.
Each year between 2013-19, a majority of respondents expected home prices to rise. The low point was 22% in 2009, after the housing bubble burst.
From 2008-12, no more than 34% of Americans thought home prices would rise.
In the recent poll, only 10% predicted home values will decrease. That is down from 25% a year ago.
A total of 18% believed there will be no change in housing prices.
The poll also found 41% of respondents choose real estate as the best investment – that was up from 35% a year ago. Stocks were a distant second.
Gallup usually finds Americans regard real estate as the best long-term investment.
The coronavirus pandemic only had a temporary stalling effect on the housing market, which picked up steam thanks to the reduction of interest rates and several rounds of stimulus payments to Americans.
Also, with much work and school being done remotely due to COVID-19 health restrictions, many people were looking for new houses to accommodate their lifestyle changes.
All that led to the supply of available houses not keeping up with demand.
Slim majorities also said it was a good time to buy a house in 1978, a time of high inflation and high mortgage interest rates, and in the mid-2000s housing bubble era.
Americans were most bullish on home buying in 2003, when 81% said it was a good time to buy a home despite home prices rising sharply.
Western residents (44%) were among the subgroups of Americans least inclined to say it is a good time to buy a house. The country's other regions said it was a good time to by a house by totals falling between 52% and 60%.
While Americans in all regions expected home prices to rise, Midwestern residents were slightly less likely to agree.
Also, respondents who said they lived in a "town" or "rural area" were less likely than those living in cities or suburban areas to predict an increase in local home values.
Gallup surveyed 961 adults from all 50 U.S. states, Washington, D.C., April 1-21, 2021, with a margin of error of plus or minus 4 percentage points.
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