A majority of Americans believe home prices will rise
Kai Ryssdal: With the American housing market going the way it has the past couple of years, we’ll take our good news where it comes. Earlier this week, the S&P/Case-Shiller Home Price Index reported a slight — very slight — gain in home prices. A scant tenth of 1 percent.
Not great. But you know how we are, right? The facts say one thing, we think another.
The editor in chief at Gallup, Frank Newport, is here every week to give us an Attitude Check, what Americans really think about the news of the week, which today flies in the face of those facts I mentioned.
Frank, good to have you back.
Frank Newport: Good to be with you, Kai.
Ryssdal: I want to make sure I’m reading your data right: More people in this country believe home values are going to go up than they are going to go down? Do I have that right?
Newport: That’s right. Thirty-three percent: ‘Yes, home prices in my area are going to go up;’ 23 percent, down. Back to 2005, we had 70 percent saying prices were going to increase.
Ryssdal: All right, so extrapolate for me, just because there’s been some buzz this week with the Case-Shiller and all the rest of it that somehow we have approached a housing bottom. Do people believe more broadly that housing is at least not going down any farther? Do you know that?
Newport: We have, right now, seven out of 10 Americans who say it’s a good time to buy a house, so that’s a good sign as well in terms of these perceptions, which of course are very important because you have to perceive the reality for the reality to become real.
Ryssdal: Whoa. That’s very zen, man.
Newport: Very zen-esque, but it’s the key principle of social psychology, regardless of what Case Shiller tells us and all that. If people don’t think prices are going to go up, they’re not going to go buy houses.
Ryssdal: Right. Does that imply that if people are interested in buying houses again, that they actually will? Is there execution in addition to that aspiration?
Newport: Well, that’s an interesting question, and for that we would need to look at the actual data that are out there, because we don’t know. What we’re measuring here is kind of the environment — the context, as it were — that buying could take place. We do know one thing, empirically. We say: Do you own a house? And that’s at 62 percent — and Kai, that’s as low as we have seen it since we’ve been asking that question. So actual homeownership is down. Where it will go in the future? We’re going to wait and see.
Ryssdal: What about, Frank, this whole issue of people owing more on this homes than they’re worth, whether they’re underwater or not? Is it still a sizable chunk of the American housing market?
Newport: Well it’s pretty negative. In the good ole days, in 2006, 92 percent of Americans who owned a home said ‘it worth more than I paid for it.’ Now it’s 53 who say it’s worth more, but 43 percent say it’s worth less. A lot of those are underwater, we make a presumption. And a lot of those, by the way, are younger homeowners based on our data.
Ryssdal: Frank Newport is the editor-in-chief at Gallup. The segment we do with them every week is called Attitude Check. Frank, thanks a lot.
Newport: My pleasure.
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