Home prices have been exploding over the past few years, and this extraordinary growth is still going strong. A decade after the housing bubble, most Americans have all but forgotten their fear of inflated home prices and adopted an increasingly optimistic outlook.
A healthy majority of U.S. adults (64%) are optimistic that home prices in their local area will continue to grow over the next year, according to a recent Gallup poll. This level of optimism hasn’t been seen since 2005, less than a year before prices peaked in the housing market bubble.
- Today, about 64% of U.S. adults believe home prices will continue growing, compared to 70% of adults in 2005
- Consumer opinions on the overall housing market reflect levels of optimism not seen since before the housing bubble burst
- Some analysts were less optimistic and warned of overheating as home flipping reached an 11-year high last year
House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar.
A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.
The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending. (Roughly one-quarter of respondents in both 2005 and 2018 said they believed house prices would remain the same.)
The property market has gained steam in the last 12 months. The national median list price now rests at $273,663, roughly 20% higher than in both March 2015 and March 2005. Between 2015 and 2016 the national median listing price only rose 4.8%, but rose by 7.4% over the last year. And yet some housing analysts are less optimisticthan many people surveyed by Gallup.
There are signs that the U.S. housing market could be overheating. The number of U.S. homes being flipped—bought and sold within a year—reached an 11-year high last year with more than 200,000 homes being flipped for second consecutive year, according to research firm Attom Data Solutions. Flipping peaked at 334,000 homes in 2005, again just before the market’s peak.
View the original article at realtor.com