David Brancaccio: We got some more so-so housing news this week — home prices across the country are still dropping in most bigger cities but are we close to a bottom for this terrible real estate market? There’s new data later this morning on pending home sales. And there’s some new polling, as well.
Which brings us to our Attitude Check — a weekly partnership with Gallup. Frank Newport is the editor-in-chief of Gallup and joins us now. Good morning.
Frank Newport: Hi, good morning.
Brancaccio: So you asked Americans — how are they feeling about this housing market?
Newport: Well I guess an interesting question is: has the bottom been reached? I think probably so, although it’s not certainly climbing back up out of the bottom. One question we ask is: are the value of houses in your local area going to go up, stay the same, or go down over the next year? There was a day in yester-year when 70 percent of Americans said they’re going to increase — that was as recently as 2005, housing prices were going to increase. That dropped — plummeted — all the way down to 22 percent in ’09; that was the bottom.
And now it’s climbed back up to about a third; 33 percent of Americans say housing prices are going to increase. That’s terrible on an absolute basis but it’s been about that for the last year or two. So we don’t see Americans attitudes getting anymore negative about housing, so I would say the problem has been reached attitudinally. Time is right now for things to go back up.
Brancaccio: This is always a lesson in the economic concept of deflation — if too many people think prices are dropping, they delay their purchases, I think. Now, do you think now is a good time to buy a house? Is that what people are telling you?
Newport: Yes, 70 percent of Americans say it is a good time to buy a house, so apparently Americans are taking advantage of the kind of thinking you were just talking about David — i.e. prices are low, now’s a good time to buy. We had over 8 in 10 said it was a good time to buy in ’03, but that fell all the way down to the low 50 percent a few years ago in ’06, ’07, ’08 saying it was a good time to buy a house.
Now it’s back up to 7 out of 10. So Americans, it looks like, attitudinally, are saying: Hm, prices are down — good time to buy.
Brancaccio: Frank Newport, editor-in-chief of Gallup, joins us every Thursday. Frank, thank you so much.
Newport: My pleasure.