http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/housing_crisis_ap_poll
By ALAN FRAM, Associated Press Writer
49 minutes ago
WA****NGTON - One in seven mortgage holders worry they may soon fail to
make their monthly payments and even more fret that their home's value
is shrinking, according to a poll showing widespread stress from the
nation's housing crisis.
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In an ominous snapshot of how the sagging real estate market and sour
economy are intersecting, the Associated Press-AOL Money & Finance
poll also found that 60 percent said they definitely won't a buy a
home in the next two years.
That was up from 53 percent who said so in an AP-AOL poll in September
2006. Only 11 percent are certain or very likely to buy soon, down
from 15 percent two years ago.
In today's economic climate, even holding onto what they already have
is a challenge and source of distress for significant numbers of
homeowners. Nearly three in 10 said they are concerned their home's
value will decline over the next two years, while 14 percent of
mortgage holders expressed worry that they might miss payments in the
next six months.
One nervous homeowner is Daniel Gallego, a warehouse worker in
Stockton, Calif., who said in a followup interview that he may have to
sell his house at a big loss.
"We may have to move in with my wife's parents or my parents," said
Gallego, 30, who has two young children. "I could pay off some debt,
then we could rent, and maybe buy another house in a few years."
He said the rising cost of gasoline and other expenses have made his
adjustable rate mortgage unaffordable. Because he doesn't expect his
home's value to recover soon, he said he may be better off moving now
before his rates rise.
One in 10 have adjustable rate mortgages, half the number who said so
two years ago. These mortgages generally start at a low interest rate
and are later adjusted to market conditions -- which has often meant
steep, unaffordable boosts that have forced many to refinance or even
lose their homes.
The growing reluctance to dip into the housing market seems to stem
partly from worry that housing prices will continue falling -- good if
you're buying a house but bad if you have to sell one.
The number envisioning falling prices in their area has grown to one
in four, while four in 10 think prices will rise, a decrease from two
years ago. Expectations for rising prices are highest in the South,
with Westerners likeliest to predict they will drop.
"This is a great time to buy, but not necessarily to sell," said
Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo.,
with his wife and four young children. He said he would love to
purchase a larger home, but can't because even if he found a buyer, he
would probably lose thousands on his house, which he bought less than
two years ago.
"We're just going to have to slap a Band-Aid on it and stay here until
the market gets a little bit better," said Jackson, 30.
Underscoring the public's unsettled feelings, the number saying local
housing prices are about right has fallen to 35 percent. Half say
homes are overpriced -- especially in the Northeast -- while those
saying housing is underpriced have doubled to one in 10. Midwesterners
were likelier than those in other regions to feel this way.
Some areas of the country buck regional trends. Laurie Jensen, a
single mother of three, struggles to make payments on her home in
Whitehall, Mont., by working as a seasonal road construction flagger
and at times collecting unemployment. She said she'd like to move
outside of town, but the area is popular and prices have surged.
"Things are pretty crazy," she said. "Places I don't consider that
great are really expensive."
The public anxiety is in reaction to an economy that is veering toward
recession and losing jobs even as the housing market sputters badly.
Foreclosures have soared to record highs, mortgage rates have
increased, sales of existing and new homes have fallen and home values
have dropped.
Gus Faucher, director of macroeconomics for Moody's Economy.com, a
consulting firm, estimated that 9 million homeowners owe more on their
home than its worth. He said his company believes home sales are at or
near bottom and home values will continue to fall until early next
year.
Even so, he said, many people bought their homes before the run-up in
values that started around 2001 and remain in good shape.
"So the value of your house goes down tem****arily," he said. Unless
the homeowner must sell now or can't afford the payments, "that
doesn't have that much of an impact."
The poll also found:
_The biggest worriers are those expecting to buy soon. Of that group
43 percent frets that their home's value will drop in the next two
years, compared with 25 percent of those not expecting to buy soon.
_Fifty-nine percent think now is a good time to buy.
_Half think this is a very tough time for first-time buyers, an
increase from two years ago. Nearly two-thirds think it's harder for
first-home buyers than it was five years ago.
The AP-AOL Money & Finance poll was conducted from March 24-April 3 by
Abt SRBI Inc. It involved telephone interviews with 1,002 adults
nationwide, for whom the margin of sampling error is plus or minus 3.1
percentage points.
Included were interviews with 769 homeowners, for whom the sampling
margin of error is plus or minus 3.5 points. The margin of sampling
error for other subgroups was larger.
___
AP Director of Surveys Trevor Tompson and AP News Survey Specialist
Dennis Junius contributed to this re****t.
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