A survey by Fannie Mae shows seven out of 10 Americans now agree with half of the proposition put forward by the National Association of Realtors in a notorious 2006 advertising campaign — that "It’s a great time to buy or sell a home."

Seventy percent of Americans polled in June and July think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010. But 83 percent believe it’s a bad time to sell, Fannie Mae said.

And while 78 percent believed that home prices will either remain flat or go up in the next year — up five points from January — the number of Americans who think housing is a safe investment has fallen from 83 percent in 2003 to 67 percent today.

The number of respondents saying they would be more likely to rent their next home if they were to move increased from 30 percent in January to 33 percent in the latest survey.

"Although most Americans believe that home prices have bottomed, they are adopting a much more cautious approach toward buying," said Fannie Mae Chief Economist Doug Duncan in a press release. "Homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing."

People with mortgages (74 percent) and even underwater borrowers (69 percent) were more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent).

African-Americans (75 percent) and Hispanics (76 percent) both still believe that owning a home is a good way to build up wealth that can be passed along to their families, compared to 58 percent of the general population.

Forecasting whether home sales and home prices have stabilized is a difficult task, and housing analysts tend to agree that the answer to that question depends on the market, and even the neighborhood.

Economists at mortgage insurer The PMI Group Inc. recently estimated that 198 of 384 markets tracked faced an elevated or high risk of price declines in the next two years, with 70 percent of the nation’s 50 most populous metro areas at risk for price declines.

Looking at the national picture, PMI economists also say two leading indicators — applications for purchase mortgages and the number of homebuyers entering into contracts to purchase homes — suggest sales of resale homes hit bottom in July and will rebound this fall.

NAR is forecasting that sales of existing homes will be essentially flat this year at 5.13 million homes, and grow by 8.3 percent in 2011, to 5.55 million. NAR predicts sales of new homes will be up 9.1 percent this year and jump 44.8 percent in 2011, to 594,000.

NAR economists think that after falling 12.9 percent last year, existing home prices will be flat this year, and show modest gains in 2011 (1.5 percent) and 2012 (2.8 percent).

Duncan and his team at Fannie Mae are less optimistic, predicting that sales of existing homes will be down 7.1 percent this year, to 4.79 million homes, and grow by 2.4 percent in 2011, to 4.9 million homes. Fannie Mae economists see new home sales falling 12.1 percent this year, before rebounding by 27.2 percent in 2011, to 418,000 homes.

Fannie Mae economists do expect national home prices to stabilize, with the median price for existing homes growing by 0.5 percent this year, 0.6 percent next year, and 3.7 percent in 2012.

But those predictions are for a purchase-only home price index that may understate volatility, because it excludes homes purchased with loans not backed by Fannie Mae and Freddie Mac.

Before its was in full swing, many housing analysts failed to anticipate the impact the financial crisis would have on housing markets.

In November 2006 — when some subprime borrowers and lenders were already experiencing financial problems, but before the collapse of the secondary mortgage market — NAR took out a series of ads that ran in the New York Times, Wall Street Journal, Washington Post, Chicago Tribune, USA Today, and Los Angeles Times.

The ads advised consumers that "It’s a great time to buy or sell a home," because interest rates were low, inventories were shrinking, prices had stabilized, and real estate was "a great investment."

In a fact sheet released in conjunction with the campaign, NAR noted that at 6.4 percent, rates on 30-year fixed-rate mortgages were "near 40-year lows," and warned that if rates increased to 7.5 percent, that would increase payments on a $250,000 mortgage by $2,000 a year.

Instead, the financial crisis and massive government purchases of mortgage-backed securities pushed rates on 30-year mortgages well below 5 percent. According to Freddie Mac, 30-year fixed-rate mortgages averaged 4.37 percent this week, up from a record low of 4.32 percent during the week ending Sept. 2. 

NAR’s 2006 fact sheet also noted that housing inventory had shrunk from "record inventory of nearly 4 million homes on the market" to 3.75 million homes.

"As inventory continues to decline, the selection of homes will once again become limited," NAR had warned. "For prospective buyers, there may never be a better time to buy a home than right now."

Inventories of unsold homes actually peaked at 4.58 million in the summer of 2008, and the 3.98 million homes available for sale in July 2010 represented 12.5 months of supply at the current sales pace, NAR said in releasing the latest numbers for existing home sales.

Six months of inventory is generally considered a healthier balance between supply and demand.

In the fact sheet accompanying NAR’s 2006 ad campaign, the Realtors association said, "Research indicates that home prices will not go any lower. While certain local markets may see limited price declines, the national picture remains bright."

At the time, NAR was predicting median home prices would begin rising again in the first three months of 2007, and that "As prices begin to rise again, buyers who do not act now could be making a costly mistake."

But the median sales price of existing single-family homes fell dramatically, from $217,900 in 2007 to $163,800 in January 2010, before rebounding to $183,400 in July.

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