Recent surveys of Realtors and consumers by two real estate Web portals reveal some skepticism about the government’s effort to turn the economy and housing markets around — and suggest consumers put less faith in incentives for homebuyers than the industry.

A twice-a-year online survey commissioned by Trulia Inc. found that only 5 percent saw economic incentives for homebuyers as the single most important step the Obama administration could take to restore "the American Dream of homeownership."

Recent surveys of Realtors and consumers by two real estate Web portals reveal some skepticism about the government’s effort to turn the economy and housing markets around — and suggest consumers put less faith in incentives for homebuyers than the industry.

A twice-a-year online survey commissioned by Trulia Inc. found that only 5 percent saw economic incentives for homebuyers as the single most important step the Obama administration could take to restore "the American Dream of homeownership."

Seven percent saw lower interest rates as the most crucial factor, while one in five said the biggest emphasis should be on getting banks to renegotiate the terms of financially troubled homeowners’ mortgages.

Most of the 2,076 consumers surveyed Feb. 20-24 by Harris Interactive for the "Trulia American Dream" survey (53 percent) said "creating jobs and job security" were the single most important thing government can do to restore faith in homeownership.

The Obama administration says the $787 billion economic stimulus bill signed into law Feb. 17 could save or create 3.5 million jobs. But the bill contained less in the way of homebuyer incentives than some in the real estate industry had hoped.

HR 1, the American Recovery and Reinvestment Act of 2009, increased the $7,500 limit on an existing tax credit for first-time homebuyers to $8,000, extends its sunset from July 1 to Dec. 1, and eliminated a requirement to repay the credit. But many real estate industry groups favored a $15,000 tax credit for all homebuyers included in a previous version of the bill approved in the Senate.

HR 1 also restored the $729,750 loan limit for Fannie Mae, Freddie Mac and FHA loan guarantee programs in high-cost housing markets, which is epxected to help keep interest rates low for qualifying buyers of eligible home in those markets.

But in an e-mail survey of nearly 700 Realtors conducted Feb. 26 to March 4 by valuation site HomeGain, only 42 percent said they expected the stimulus bill would stabilize home prices or get them rising again in 2009. Another 45 percent said they would have no impact, while 13 percent said they would cause home prices to drop. …CONTINUED

Some Realtors surveyed by HomeGain said stronger buyer incentives were needed, and others said a separate initiative to help homeowners avoid foreclosure would only prolong the downturn.

The day after signing the stimulus bill into law, the Obama administration revealed details of an initiative intended to help up to 9 million borrowers refinance their loans or negotiate loan modifications (see story).

The Treasury Department estimates that the $75 billion homeowner stability initiative could prop up the average home price by $6,000, by facilitating 3 million to 4 million loan modifications. Fannie Mae and Freddie Mac are expected to refinance another 4 million to 5 million loans in cases where borrowers have seen the equity in their homes slip to less than 20 percent because of falling home prices.

Nevertheless, 53 percent of Realtors surveyed by HomeGain said they expect home values will decline in the next six months, while 36 percent expect them to remain the same. Only 11 percent expected prices to rise.

Realtors were most pessimistic in the West and Northeast, with 66 percent of Realtors in the Western states expecting price declines in the next six months, and only 6 percent of Realtors in the Northeast expecting price appreciation in the same period.

The HomeGain survey also suggested a disconnect between Realtors and their clients when it comes to valuations. Only 14 percent said their clients agree their homes are worth the listing price they recommend, while 45 percent said clients typically believe their homes are worth 10 percent to 20 percent more.

A survey released last month by the valuation site Zillow suggested that homeowners are becoming more realistic about recognizing when their property has lost value because of market trends (see story).

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