Homeowners Expect Prices to Keep Rising

The L.A. Times reports:

Americans remain largely optimistic that home values will keep rising in the next few years, but some are concerned that they won't be able to keep up with their mortgage payments, according to a Los Angeles Times/Bloomberg poll.

More than one-quarter of those who have adjustable-rate mortgages say they aren't sure they'll be able to make their monthly payments if their interest rate goes up. These loans have been particularly popular in California and other states with high housing costs.


Homeowners' views in the new nationwide poll show widespread faith in the real estate market, despite signs that prices and sales are cooling. The median price of existing U.S. homes sold in January was $211,000, down from a record high of $220,000 in August.

In the Times/Bloomberg poll, nearly half of homeowners expected the price of their primary residence to rise 5% to 15% over the next three years. Twenty-five percent expected appreciation of 16% or more in that period.

Just 5% predicted no price increase.

You probably remember the polls in the late 1990's when the public thought the stock market was going to go up 20% a year forever.Yet here we are 6 years later and the S&P 500 and the Nasdaq haven't taken out their March 2000 highs.On the real estate side, maybe Fannie Mae will start promoting the benefits of 100 year mortgages.You'll want to read this whole article to find out the boundless optimism of real estate investing.