Consumer confidence will play a big role in any housing recovery. According to a June and July survey by Fannie Mae, 70% of Americans think it is a good time to buy a house, an increase of 6% responding to the same question in a similar survey conducted in January 2010. Not surprisingly, 83% also think now is a bad time to sell. Those surveyed are also becoming more optimistic about home values;78% think that home prices will either remain stable or increase next year; a 5% increase over the January survey.
Mortgage rates will also play a big role in the housing recovery. They are very low by historic standards today. Importantly, Federal Reserve policies intended to prevent a double dip recession are helping to keep mortgage interest rates low, and are likely to remain in place for some time. The slow recovery of the business sector, while not encouraging from an employment standpoint, also means that there will be less upward pressure on interest rates in the near future.
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