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Optimism up, sales down in the housing market

April 29, 2014

There's good and bad news for the nation's housing market.

Optimism for the residential real estate market is growing among Americans, according to a recent Gallup poll, and more than half of respondents—56 percent—stated they are expecting average home prices in their local areas to rise, which is up from 33 percent just two years ago.

The recent results showed optimism is 35 percent higher among Americans than the low of 21 percent posted in January 2011. Still, the reading is below the 60 percent posted before the downturn of the housing market and economy.

Consumer optimism is rising for the nation's housing market.

Results for this Gallup poll were based on telephone interviews with a random sample of 1,026 adults aged 18 and older. Respondents resided in all 50 U.S. states and the District of Columbia. Seventy-four percent of Americans believe it is a good time to purchase a home, while 24 percent believe it's still a poor time to buy. That ranks among the most positive readings Gallup has found on this question, which bodes well for all aspects of the housing market, including home insurance.

The good and the bad

While optimism for the housing market is up, sales are not. Sales of newly constructed homes dropped 14.5 percent in March, a major dip that emphasizes the housing market is actually slowing down.

“Homes for sale are moving fastest in markets with recent price gains, as well as in markets where supply is perennially tight,” Jed Kolko, the chief economist at Trulia, told Forbes. “The fact that the low-price tier is moving fastest is yet another hurdle for first-time homebuyers:  not only do potential first-timers face declining affordability and a slow jobs recovery, but the homes they can afford aren't waiting on the market for them.”