70% of Americans Predict Home Prices Will Continue to Rise
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That's a record-high percentage, and is up from 40% at the beginning of the pandemic, according to a Gallup poll.
Americans are bullish on the idea that already surging home prices will rise even more in the coming months, according to a recent Gallup poll.
A majority of U.S. adults surveyed say the average price of houses in their localities will increase during the next year, compared with just 40% in April 2020 at the beginning of the coronavirus pandemic, the findings show. And only 10% predict home values will fall in 2021, down from 25% in 2020.
Most Americans expected home prices to rise each year since 2013, and the current 71% is the highest percentage Gallup has recorded since 2005. However, only 60% of Midwest survey takers think home prices will rise this year, compared with those in the East (77%), West (76%) and South (72%).
The numbers also varied based on the types of communities where respondents live. Seventy-five percent who live in big and small cities and the suburbs believe home values will rise, compared with 63% who reside in towns and rural areas.
The report notes that low mortgage interest rates coupled with coronavirus relief payments and the surge in full-time remote work has families seeking new houses to accommodate lifestyle changes. However, while Americans generally think buying a home is a good idea, only 53% say it is the right time to buy, which is consistent with 2020.
In 2005, 70% of those who Gallup surveyed also thought prices would rise that year, but that was during the emerging housing bubble that went bust leading to the Great Recession. During and after the recession, from 2008 through 2012, only 34% of Americans surveyed thought home prices would rise.
Home prices are climbing to new heights this year, keeping many potential buyers out of the market, according to the real estate website Zillow. The median price for an existing home in May was $350,300, up a record 24% from May 2020. The median sales price of all new houses sold in May was $374,400, up 18% year over year.
Covid-19 has decreased middle-income households' ability to find attainable homes, with frontline workers hit hardest, according to an Urban Land Institute report. The analysis shows the severest housing cost burdens among middle-income families are mainly in the most populous regions, while there is a national struggle for lower-income households to find attainable rental units.
For more information about the Gallup poll, click here.
Jean Dimeo is the managing editor of Route Fifty.
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