Home Prices Are On The Rise!

The majority of Americans now are forecasting home prices to rise, and only about a third are expecting prices to fall, a reversal in attitudes of a year ago.

A monthly survey by mortgage finance firm Fannie Mae found 51% of those questioned in April believe prices will rise in the next 12 months, while only 35% are projecting a drop in prices. It is the first time in the three-year history of the survey that a majority said they expect prices to increase.

A year ago, 49% were expecting further price declines while only 32% said they though prices were on their way up.

The latest data from the housing market back up the this new level of confidence in the housing recovery. The S&P Case-Shiller Home Price Index rose 9.3% over the last 12 months, the biggest annual rise in home prices since the height of the housing bubble in 2006. For more information about Lloyd Segal visit http://www.lloyd-segal.net

McMansions are making a comeback

As the economy recovers, America's love affair with the oversized McMansion has been reignited.

During the past three years, the average size of new homes has grown significantly, according to a Census Bureau report released Monday. In 2014, the median home in the U.S. hit an all-time record of 2,306 square feet, up 8% from 2009.

During the recession, Americans downsized and the average new home shrunk in size by 6% over two years to 2,135 square feet. At the time, many industry experts said the days of the McMansion were over.

The shrinkage was supposed to indicate that a new era had begun, with young buyers seeking to live closer to urban cores and settling for smaller places and baby boomers downsizing after their kids had flown the nest.

But it wasn't that consumers wanted less space, many just couldn't afford more, said Jeffry Roos, a regional president for home builder Lennar. And now that the economy is improving, they're demanding bigger homes again, he said.

Related: Best deals on real estate

In 2014, the National Association of Home Builders conducted a survey of homebuyer preferences and found that people preferred a median home size of 2,226 square feet, just shy of the Census Bureau's recently reported median size.

And the homes seem to be getting even bigger this year, according to builders. Marcie DePlaza, a division president for GL Homes, said so far this year her company is selling homes that average about 7% larger than during the first five months of 2014.

Rose Quint, an assistant vice president for survey research with NAHB, said the trend toward larger homes might be less pronounced if mortgages were easier to get for low- and middle-income borrowers. With tough underwriting standards in place, the buyers who land mortgages tend to be more affluent and able to afford bigger houses.

Lloyd Segal