As government data points to depreciating home prices in certain areas of the country, a new survey released this week shows more than half of Americans still expect prices to increase over the next 12 months.
According to poll results released Tuesday by personal finance site Bankrate.com, 53 percent of consumers anticipate home prices will increase over the next 12 months, while 8 percent said prices will drop. Those percentages compare to 55 percent last year who said that prices would rise and 9 percent who (wrongly) predicted a decline.
"Housing, like the stock market, is something consumers look to as an indicator for whether things are headed in the right direction," said Greg McBride, CFA, chief financial analyst for Bankrate. "When home prices fall, everyone gets a little queasy—homeowners and renters alike. The expectation of continued home price increases underscores an expectation for continued improvement in the job market, household finances and the overall economy."
In all, consumers expressed more positive feelings regarding their personal financial situation, propelling Bankrate's Financial Security Index up to 100.4 for September, the first increase in two months. The index topped out for the year in January at 102.6 and has remained above the 100 mark (the level that illustrates improvement over the prior year) for seven of the year's nine months.
For the most part, respondents expressed slightly higher confidence in most of the index categories, with 26 percent saying they feel more secure in their jobs compared to last year (as opposed to 14 percent feeling less secure), 27 percent saying their net worth is higher (20 percent said lower), and 27 percent saying their overall financial situation has improved (compared to 26 percent who said the opposite).
On the topics of savings and debt, responses were less positive, with only 19 percent saying they're more comfortable with the amount of money they have in savings—compared to 35 percent who said they're less comfortable—and equal shares saying they are either more or less comfortable with the amount of debt they've acquired.
Breaking down the demographics, Bankrate found a major divergence between responses offered by men and those given by women. While men's feelings of financial security improved across all five categories, women's feelings dipped in every one:
- 33 percent of men said they have more job security than they did last year compared to 18 percent of women.
- 39 percent of women are less comfortable with the amount they have saved compared to 31 percent of men.
- 26 percent of men are comfortable with their debt, while only 18 percent of women said the same.
- 34 percent of men said their net worth is higher than a year ago compared with 21 percent of women.
- All things considered, 30 percent of women said their financial situation is worse. Only 22 percent of men gave the same response.