Rate Watch
In a recent Experian/Gallup Personal Credit Index survey, consumers were asked about the housing market and mortgages. Most consumers expect housing prices and mortgage rates to rise in the next year. Only five percent of consumers expect housing prices to decline in the next year, while 70 percent expect them to increase, and another 24 percent expect them to remain steady. Among those who expect changes, most say the increases (or declines) will be modest, though about a quarter of all consumers expect housing prices to rise 10 percent or more in their area. Only about a quarter of all consumers have heard of a potential “housing bubble,” with 65 percent saying they have heard nothing about it, and another 12 percent saying “only a little.” However, when told that a housing bubble is when the prices of houses have increased so quickly and gone so high that it’s like a bubble that could burst and suddenly there could be a big drop in the price of houses, about four in ten consumers say it is either very or somewhat likely that such a situation could occur in their area within the next three years. Lower income consumers (under $40,000 annual household income) are most likely to say a housing bubble could occur in their area — 46 percent express that view, compared with about 30 to 33 percent among consumers with higher incomes.
Sources: Associated Press, The Gallup Organization
