Three recent surveys show continued turmoil in housing and financial markets have many Americans postponing decisions to buy or sell a home, but that they remain optimistic about the near-term prospects of a recovery and still consider a home to be a good investment.

The surveys — commissioned by real estate portal Zillow, real estate franchisor and brokerage Realogy Corp., and advertising firm J. Walter Thompson — suggest that should government action to unfreeze credit markets succeed, consumers stand ready to participate in a housing recovery.

Zillow’s quarterly homeowner confidence survey showed that when it comes to their own home’s value, many Americans may be out of touch with reality.

Although Zillow’s vast database of public records showed an estimated 74 percent of homes have lost value in the last 12 months, only 51 percent of homeowners polled believed their own home had lost value in the past year.

Asked to look ahead six months, 61 percent of homeowners said they expect their own home’s value will hold steady or grow. But they evidently didn’t think their neighbors’ homes would fare as well, since 57 percent said they expect home values in their local market to decrease in the next six months.

Only 3 percent said they’d try to sell their home in the next six months, down from 5 percent of those polled three months ago. The percentage of those who said they planned to buy a home in the next six months also slipped from 4 percent in the second quarter to 3 percent.

The increased reluctance to buy into a market when home prices in some areas have seen double-digit price declines could be a reflection of worries about where the economy is headed. The Harris Interactive online survey of 2,021 adults (including 1,388 homeowners) was conducted between Oct. 7 and Oct. 9, a week the stock market saw historic drops.

Zillow’s “misperception index” — a measurement of the difference between those who think their home’s value has increased and the percentage of U.S. homes that actually increased in value — has been cut in half, from 32 in the second quarter to 16 in latest survey.

“We are seeing some movement toward more accurate perceptions of home-value declines, but there’s still a significant gap between reality and perception,” said Stan Humphries, Zillow’s vice president of data and analytics, in a statement.

The survey also showed that worries about the economy have consumers cutting their household spending, “a fascinating distinction in consumer psychology” that demonstrates there’s “clearly still some denial,” about home-price declines, Humphries said.

Since the Zillow survey was conducted, the stock market has rebounded a little and there are some signs the credit crunch could be easing.

Realogy survey

In a survey of 1,023 homeowners conducted from Oct. 23-25 by Ipsos Public Affairs for Realogy Corp., 91 percent said they believed owning a home is still the best long-term investment they can make.

The survey also found that 27 percent said the current economic environment was causing them to put their plans to purchase a home on hold.

To jump-start home buying, Realogy is calling for the government to buy-down 30-year fixed-rate mortgage rates to 4.5 percent or lower for homes up to $1 million.

Interest rate buy-downs are sometimes used as incentives by sellers, who pay lenders extra points up front to obtain a reduced interest rate for a buyer. Buy-downs can be permanent or temporary — they are often phased out over two or three years.

Realogy says there are a number of ways the government could structure and fund an interest-rate buy-down program, which could be included as part of stimulus packages now being discussed by lawmakers.

Richard A. Smith, the company’s president and chief executive officer, said getting the government involved in buy-downs could have an impact on sales volume and home prices.

“We think the pent-up consumer demand for housing, if encouraged, is more than sufficient to stabilize housing,” Smith said in a statement. “In our view, substantially lower mortgage rates will stimulate both existing- and new-home sales, reduce home inventory levels, stabilize home prices and, ultimately, help the overall economy.”

In a separate poll of 1,500 real estate broker-owners, Realogy said 54 percent would expect a “significant increase” in home sales in their market from such a move. About 51 percent said lowering the cost of borrowing would also increase home prices. About one in 10 of those who expected price increases said they might be as much as 5 percent to 7.5 percent.

That might raise objections in some circles, as many economists believe home prices in some markets still need to fall further in order to restore affordability and reach levels where they are supported by fundamentals like income.

Realogy spokesman Mark Panus said the actual impact on prices would be “hard to handicap. It’s nice to see what the response (from brokers) is, but we are not dealing in absolutes.”

Panus said that while the government has taken many steps to prop up the financial system and help borrowers facing foreclosures, an interest-rate buy-down would stimulate sales.

“People are looking for a signal that it’s OK to move forward,” Panus said. Many are waiting on the outcome of the November elections and to see what additional stimulus programs Congress puts forward. “You wait until you see what all your options are, and until then, you may not act.”

American Dream survey

A third survey that addressed public perceptions about homeownership during the economic downturn was conducted from Sept. 11-19 by J. Walter Thompson.

The survey, of 2,112 adults, found homeownership ranked as one of the most important elements of achieving the “American Dream.”

Although financial security, finding happiness, personal independence, “fulfilling my potential” and freedom of speech ranked higher, those surveyed said homeownership was a bigger component of achieving the American Dream than “a better life for my children,” freedom from fear of oppression, and a comfortable lifestyle.

The so-called “American Dream in the Balance” survey found homeownership was important to all age groups, but slightly more important to baby boomers than any other group.

The survey found that only 65 percent of Americans with household incomes below $40,000 a year believe in an American Dream, compared with 75 percent of those earning $40,000-$70,000 and 82 percent of those with incomes above $70,000.

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