(Bloomberg News) More than half U.S. homeowners and renters say housing won't recover until at least 2014, reflecting a deepening pessimism about the real estate market, according to a survey by Trulia Inc. and RealtyTrac Inc.
The survey, taken in April, found that 54 percent of respondents don't expect a recovery for at least three years, up from 34 percent in November, the two real estate data companies said today. Those who see a turnaround by the end of next year fell to 15 percent from 27 percent.
The housing market is weakening as near record-low interest rates and falling prices fail to boost demand after the expiration of a federal tax credit for homebuyers last year. Values will come under more pressure as 1.8 million properties that are delinquent or in foreclosure are added to the inventory of unsold homes, according to a March estimate by CoreLogic Inc., a real estate information firm in Santa Ana, California.
"Demand remains weak, loans are increasingly difficult to qualify for and the shadow inventory of several million distressed properties is weighing down the market," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in a statement. "All of these things need to improve before housing can recover."
The rebound will be a "long and gradual process," said Pete Flint, chief executive officer of San Francisco-based Trulia. "We have another 18 months until we start to see signs of price stability in the housing market," he said in the statement.
Government Response
According to the survey, 45 percent of respondents said the government isn't working hard enough to prevent foreclosures. Seventeen percent said too much is being done, 16 percent believe the government's response is appropriate and 22 percent said they aren't sure.
The Treasury Department's main foreclosure-prevention program, called the Home Affordable Modification Program, has resulted in about 587,000 permanent loan modifications, short of its goal of up to 4 million.
House Republicans say the program, which pays banks and mortgage servicers to lower borrower payments, hasn't done enough to help struggling homeowners, and voted to abolish it. A coalition of 50 state attorneys general negotiating a settlement with mortgage servicers began to fracture in March after seven of its Republican members objected to a proposal to force lenders to consider reducing loan balances for some homeowners.
Touched By Crisis
Hopes for a quick real estate recovery are waning as more homeowners are affected by the foreclosure crisis. A third of respondents have or know somebody who has stopped making payments, walked away from a mortgage, applied for a loan modification or have lost a home through foreclosure or short sale, according to today's report.
U.S. foreclosure filings fell to the lowest level in three years in the first quarter amid a lender backlog in processing paperwork, RealtyTrac said on April 14. Foreclosure processing slowed after the state attorneys general and federal regulators began separate investigations last year of the mortgage- servicing industry for the use of faulty documents and signatures to seize properties.