Most Americans Now Believe Housing Recovery Remains Unlikely Until 2014, Says New Trulia-RealtyTrac Report

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In Wake of Congressional Efforts to Repeal Obama Administration's Making Home Affordable Program, 45 Percent of U.S. Adults Say Government Not Doing Enough to Prevent Foreclosures

Today Trulia and RealtyTrac jointly released the latest results of an ongoing survey that has tracked American attitudes toward foreclosed homes since 2008. Harris Interactive conducted this online survey on their behalf from April 15 to 19, 2011, among 2,018 U.S. adults aged 18 and over.

"Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off," said Rick Sharga, senior vice president of RealtyTrac. "Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover."

"Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate," said Pete Flint, co-founder and CEO, Trulia. "On the flip side, mortgage rates won't stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market. In my eyes, we have another 18 months until we start to see signs of price stability in the housing market."

KEY FINDINGS

American Expectations for Housing Market Recovery Falters

As more cities across the nation experience double dips in home prices[1], more than half (54 percent) of U.S. adults believe recovery in the housing market will not happen until 2014 or later, according to the survey released today. In a previous survey conducted six months ago[2], 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to think this will happen.



Current Government Foreclosure Prevention Programs Not Enough

With recent reports criticizing the underperformance of the Obama administration's Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives Program (HAFA), Republicans are increasingly adamant about repealing these initiatives entirely. This debate appears to run contrary to what Americans ask of their government as the housing market struggles to recover. According to the survey released today, 45 percent of American adults say the government is not doing enough to prevent foreclosures. Only 17 percent say too much is being done while 16 percent say they are doing the right amount and 22 percent say they are not sure.

The widespread prevalence of distressed homeowners facing foreclosures in today's market is one reason why negative sentiment toward the government may be so high. Almost one-third (30 percent) of homeowners self-reported that they have or know someone who has applied for or received a loan modification, stopped paying their mortgage, foreclosed, walked away or short sold their home.



Expectations for Buying a Foreclosure

More than half of U.S. renters (56 percent) and 47 percent of current homeowners are at least somewhat likely to purchase a foreclosed home. Along with having some concerns about hidden costs, a risky buying process and loss in home value, many potential buyers expect to save money if they buy a foreclosure versus a similar non-foreclosed home. In fact, on average, American adults expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure - not too far above the average discount of 36 percent on sales of bank-owned homes (REO) compared to sales of homes not in foreclosure reported in the RealtyTrac 2010 Foreclosure Sales Report.



"Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate," said Pete Flint, co-founder and CEO, Trulia. "On the flip side, mortgage rates won't stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market. In my eyes, we have another 18 months until we start to see signs of price stability in the housing market."


"According to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities," said Ken Shuman, Trulia Spokesperson. "With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer. Whether you are looking at foreclosed properties, short sales or existing homes, make sure you have enough cash in the bank for eight to 12 months of mortgage payments and don't buy a bigger sized home than you really need."

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