Time ripe to buy US homes before prices rise -poll

By Lynn Adler

NEW YORK, April 21 (BestGrowthStock) – Most consumers think U.S.
homes are affordable and the time is ripe to buy as many expect
prices to rise in the next year, a new survey showed on
Wednesday.

U.S. home buyers remain worried about the economy. But with
average home prices down about 30 percent nationally from 2006,
mortgage rates low and federal tax credits still in play, more
than 80 percent of buyers see this as a good time to purchase,
a Century 21 Real Estate LLC poll found.

The First-Time Home Buyers and Sellers survey by the
Realogy Corp. unit polled consumers who bought or sold their
first home within the past year or planned to do so within the
next year.

“Today’s market presents a generational opportunity for
home buyers and current home owners looking to leverage their
market position,” Rick Davidson, president and CEO of
Parsippany, New Jersey-based Century 21, said in a statement.

The housing market is showing signs of stabilizing after
its deepest plunge since the Great Depression, though a rapid
recovery is highly unlikely with unemployment hovering just
below 10 percent.

Recovery will be sporadic and slow, most analysts agree,
constrained by restrictive lending standards and a stockpile of
foreclosed properties that must also be sold.

Almost half of first-time home buyers and sellers expect
home prices to increase over the next year, the survey found.

Such indications of improved sentiment have been in short
supply and eagerly sought in the midst of the important spring
home sales season. Spring sales are especially important this
year as some major government backstops are yanked.

The Federal Reserve on March 31 ended its purchases of more
than $1.4 trillion in mortgage-related securities aimed to hold
down mortgage rates, rejuvenate housing and the economy.

Meantime, buyers eligible for an $8,000 first-time home
purchase tax credit or a $6,500 repeat-buyer credit need to
sign contracts by the end of this month and close on loans by
the end of June.

Eighty-four percent of first-time buyers surveyed by
Century 21 are aware of the credit and 64 percent of those who
are in the market for their first home said they qualify.

The same percentage of sellers were aware of the move-up
buyer credit, though just 33 percent said they qualified.

Home prices, the tax credit and low interest rates were the
top three reasons first-time buyers decided to enter the
market.

Personal/family reasons and home prices were the main
factors leading owners to sell their house for the first time.

Home prices also drove about half of the sellers surveyed
to move up to bigger homes, and about 37 percent to change
neighborhoods.

Losing money and getting offers near their asking price
were the main concerns for sellers.

About 40 percent of those polled were more worried about
the economy than a year ago, Century 21 said, and market
conditions generally favor buyers. However, about half of
first-time buyers see prices rising by next spring, helping
reestablish a balance between buyers and sellers.

Almost 80 percent of those polled said mortgage rates are
either somewhat or very affordable. Low rates influenced 46
percent of owners to sell for move-up reasons and another 43
percent to change neighborhoods.

Thirty-year mortgage rates have averaged around 5 percent
through the first three months of this year, rising slightly in
April, according to home funding company Freddie Mac.

But as many banks have tightened lending practices, the
vast majority also said that getting a home loan is either
somewhat or very difficult.

Century 21 said that most of those who moved or plan to
move are staying between 10 and 50 miles of their current
homes, suggesting market conditions may be spurring the
transactions rather than demand for big geographic changes or
job relocations.

The on-line survey was conducted with 708 respondents from
March 12-16 by MarketTools, Inc.

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Time ripe to buy US homes before prices rise -poll