Homeowners more pessimistic about the future value of their homes

According to Zillow's second quarter Harris survey of 1,482 homeowners, homeowners are more pessimistic about the future of home values than they have been in the past three quarters. More than a quarter (28%) think home values in their local real estate market will decrease in the next six months, up from one-fifth (20%) in the first quarter. And fewer think home values will increase – 30% in Q2 versus 42% in Q1.  A few glimmers of optimism did remain, however. Quite a few homeowners (38%) think home values in their local market have reached a bottom. Another 30% think the bottom hasn’t arrived yet.

BOTTOM LINE

We have been saying for the last 6 months that prices have another 10-20% to fall before they reach bottom.  See our housing articles or our interest rate housing correlation analysis. The prospect of rising interest rates coupled with looming foreclosures will lead to another wipeout in the next couple of years. All other housing data is coming in below homeowners already low expectations.  Forget what your mortgage broker tells you, now is not the best time to buy a home, unless you want to lose whatever money that you place as a down payment. 


Chart via Zillow:

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