Housing Experts See Stronger Recovery on Horizon
More Than Half Favor Elimination of Mortgage Interest Deduction, According to the September 2012 Zillow Home Price Expectations Survey
SEATTLE, Sept. 20, 2012 /PRNewswire/ -- Economists expect home prices to rise by a total 2.3 percent during 2012, and overall have become more bullish on home prices than they were in the second quarter, according to the September 2012 Zillow® Home Price Expectations Survey, compiled from 113 responses from a diverse group of economists, real estate experts and investment and market strategists.
The survey, sponsored by leading real estate information marketplace Zillow, Inc. (NASDAQ: Z) and conducted by Pulsenomics LLC, is based on the projected path of the S&P/Case-Shiller® U.S. National Home Price Index during the coming five years.
Survey respondents expect home prices to increase in full-year 2012 by 2.3 percent, up from their forecast of -0.4 percent in the June 2012 survey. Respondents have also revised their forecasts for 2013-2016, predicting steadily increasing home values in each year.
"This is further evidence that we're seeing a true recovery in the housing market," said Zillow Chief Economist Dr. Stan Humphries. "Not since mid-2010 – in the midst of the homebuyer tax credits – have we seen this group so bullish on housing. It's refreshing to see this optimism at a time when the market seems to be making an organic recovery, in the absence of an artificial stimulant like the tax credits."
The most optimistic[i] quartile of panelists predicts a 4.4 percent increase in 2012, on average, while the most pessimistic[ii] predict an average increase of 0.3 percent.
Mortgage Interest Deduction.
Additionally, respondents overwhelmingly favor changes to the mortgage interest deduction[iii]. Ten percent believe it should be eliminated as soon as possible; 50 percent believe it should be eliminated, but phased out gradually; and 30 percent believe it should remain, but that more restrictions should be placed on eligibility. Only 11 percent believe it should remain as-is.
"Although the mortgage interest deduction remains enormously popular with existing and aspiring homeowners, it costs the federal government about $90 billion a year," said Pulsenomics LLC founder Terry Loebs. "Time will tell whether the unprecedented fiscal challenges facing the U.S. coupled with a housing market now on the mend will embolden more policymakers to touch this lightning rod."
Other supplemental questions[iv]
The panel also weighed in on expectations for the housing policies of the presidential candidates and the exercise of eminent domain to seize mortgages secured by underwater homes. Responses are below.
Additional details regarding this portion of the survey are available at www.pulsenomics.com.
This is the 14th edition of the Home Price Expectations Survey, and it was conducted from Aug. 30 to Sept. 14 by Pulsenomics LLC on behalf of Zillow, Inc.
Zillow (NASDAQ: Z) is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 markets at Zillow Real Estate Research. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile, Postlets®, Diverse Solutions™ and RentJuice®. The company is headquartered in Seattle.
Zillow.com, Zillow, Postlets and RentJuice are registered trademarks of Zillow, Inc. Diverse Solutions is a trademark of Zillow, Inc.
Case-Shiller is a registered trademark of Case Shiller Weiss, Inc.
Pulsenomics LLC is an independent research and consulting firm that specializes in data analytics, new product and index development for institutional clients in the financial and real estate arenas. Pulsenomics also designs and manages expert surveys and consumer polls to identify trends and expectations that are relevant to effective business management and monitoring economic health.
[i] Based on the 25 percent most optimistic panelists in terms of cumulative home price change through 2016.
SOURCE Zillow, Inc.