CHICAGO, IL--(Marketwired - Jul 30, 2014) -
- Six in 10 (59 percent) say the value of their house has risen in the last 12 months
- More than half of Americans with a mortgage say interest rates will rise over the next five years
- BMO Economics: Housing affordability remains historically very attractive
With home prices steadily rising, a new study released today by BMO Harris Bank found that more than half (59 percent) of American homeowners are optimistic the value of their home will increase over the next year. The same percentage feels their home value has risen over the past year.
"With market prices steadily rising over the last 24 months, homeowners are optimistic their home prices are increasing. In many cases, this will mean returning to pre-recession normal as the recovery continues," said Kevin Christopher, Head of Mortgage Sales, BMO Harris Bank. "This spring home buying season was a busy one, and we expect our bankers to continue seeing significant activity throughout the summer. We encourage those looking to take advantage of current prices to consult with a banker to take the first step, whether it's getting pre-approved or making a purchase."
When Americans with mortgages were asked about the forecast for interest rates:
- 59 percent said they expect rates to go up, with 42 percent expecting a small increase and 17 percent anticipating a large increase
- Slightly more than a tenth (13 percent) expect a decrease in rates < li>28 percent believe rates will stay the same
"Housing affordability remains historically very attractive, despite rising home prices and borrowing costs coming off their lows. As a result, there continues to be decent demand for homes, assisted from firming household formation," said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. "Although overall U.S. housing activity is experiencing slower momentum than we saw earlier in the recovery, positive developments such as the recent down-drift in mortgage rates and solid job numbers should give an added boost to housing."
Survey results cited in this report are from a Pollara survey commissioned by BMO Harris Bank using interviews with an online sample of 2,500 Americans conducted between April 1st and 7th, 2014. The margin of error for a probability sample of 2,500 is ± 1.96%, and 250 is ± 6.2% 19 times out of 20.
For more trends, tips and tools to help you plan for your financial future, including buying a home, visit bmoharris.com/YourFinancialLife.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris ® and BMO Harris Bank® are trade names used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North America n financial organization with approximately 1,600 branches, and CDN $582 billion in assets (as of April 30, 2014).