Most Expect Stagnant Home Prices Over Coming Year

By:: Kara Johnson | September 15, 2010

Short-term confidence in the housing market is sagging, even as homeowners are becoming somewhat more optimistic about the long-term picture.

Only 15 percent of U.S. homeowners expect their homes will increase in value over the next 12 months, according to a new Rasmussen Reports poll, down three points from last month. It’s the lowest the figure has been since Rasmussen began asking the question in December 2008.

At the same time, the majority of homeowners expect prices to remain unchanged, with only 28 percent expecting their home values to decrease over the next year.

Homeowners seem to be much more optimistic about the long-term, though, with 48 percent saying they expect their home value to increase over the next five years, up from 41 percent last month. Only 12 percent expect their homes to continue to decline in value over that time.

Approximately one-third of homeowners report being underwater on their mortgages, with 31 percent saying they owe more than their home is worth, about the same as in previous months.

At the same time, Americans remain largely positive in their attitude about home ownership, with 60 percent saying that buying a home is the best investment a family can make. Only 19 percent say it is not, with the remainder not sure.

The survey of 730 homeowners has a margin of error of plus or minus 4 percent, with a 95 percent level of confidence, and was taken Sept. 11-12.

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