Homebuyers are increasingly optimistic about the housing market, according to a recent survey by the California Association of Realtors.
More California homebuyers believe home prices will rise over the coming decade, with 25 percent of those surveyed saying prices will go up in the coming year, 41 percent saying they will increase over the next five years, and 73 percent saying they will rise over the next 10 years. When the same question was asked in 2009, the percentages were 8, 35, and 60, respectively.
None of the buyers questioned in the survey believe home prices will fall in the future.
Buyers face significant challenges in obtaining financing, however. Faced with tighter lending standards today, buyers rated their difficulty in getting a home loan at 8.5 on a scale of 10, with 10 being extremely difficult. That’s up from 8.0 in 2011.
The survey also found that housing-related tax deductions remain extremely important to homebuyers across all income levels and age groups, with 79 percent of all buyers saying mortgage interest and property tax deductions are “extremely important” in their decision to buy a home.
The decrease in home prices over the past five years was the No. 1 reason for purchasing a home, cited by 45 percent of survey respondents. Other reasons included the desire for a better location (12 percent) and favorable prices/financing (11 percent).
Other findings from the survey:
- Higher down payments are the norm today, with buyers putting an average of 25 percent down on their home purchase. The average down payment has been higher than the traditional 20 percent since 2009, when the question was first asked.
- Ninety-three percent of buyers obtained a fixed-rate loan, up from 84 percent in 2011.
(Image courtesy of Mickey.!, via Flickr.)