Gallup said today that more than half of Americans expect average home prices in their local area to increase over the next year.  Fifty-one percent of respondents said they expected an increase, up from 33 percent one year earlier and the first time since 2007 that the positive responses to that question topped 50 percent. 

Thirty-four percent of respondents expect home prices to remain the same, down from 44 percent and only 14 percent expect further declines.  Last year 23 percent thought homes would lose more value and at the peak of the housing crisis in 2008 38 percent were looking for more losses.

Gallup conducted its annual Economy and Personal Finance survey from April 4 to 14, polling 2,000 respondents, more than 1,400 of which were homeowners, on various housing topics.  Fifty-one percent of both homeowners and renters expected price increases however 37 percent of homeowners thought prices would stay the same and 12 percent thought prices would decrease compared to 27 percent and 20 percent of renters.

There were substantial differences by income level.  Of households reporting annual incomes above $75,000, 62 percent expect price increases compared to fewer than half of those households in the two lower income categories.

Residents of the Western part of the country are most optimistic about home values, with 62% expecting prices to increase compared to 44 to 49 percent in the other regions.  Those who describe their residence as being in a city or suburban area are much more optimistic about home values than are those who say they live in a "town" or "rural area."

Fewer homeowners have a perception that their homes are "underwater."  In the Gallup survey last year 53 percent of homeowners said their homes were worth more than they paid for it, this year that response was up to 63 percent.  Gallup said this provides evidence of a recovery in home values, although still not back to levels of five or more years ago. 

Fifty-two percent of younger homeowners (under age 50), who are more likely to have bought their homes more recently, say their homes are worth more than when they bought it compared to 71 percent of older homeowners.  More homeowners living in the East were inclined to believe their homes are worth more than when they bought it than in the other regions.  Upper-income homeowners are more likely than lower-income homeowners to say the same.

Americans never really gave up on the wisdom of buying a home.  Even in the 2006-2008 period more than half told Gallup that it was a good time to buy.  That faction has now risen to 73 percent, the highest since 2003.  Gallup found the sentiment to be fairly universal with few differences among subgroups except for that defining household income.  Higher income respondents provided positive responses 87 percent of the time compared to 55 percent of those with incomes below $30 percent.  Of those in the middle income group 76 percent thought it was a good time to buy.

Gallup said that while the effects of the housing slump have not completely vanished, Americans are as bullish on the housing market as they have been at any time since before the housing bubble burst several years ago.