According to a home buyer survey taken in 2012 by the California Association of REALTORS®, California home buyers are more optimistic about the housing market now than they were three years ago. More home buyers this year believe that home prices will rise, with 25 percent saying prices will rise in one year; 41 percent saying they will rise in five years; and nearly three-fourths of buyers (73 percent) believing home prices will rise in 10 years. This compares to only eight percent, 35 percent, and 60 percent, respectively, in 2009, when the question was first asked.
The survey also found that the mortgage interest deduction is extremely important to home buyers across all income levels and age groups, with 79 percent of all home buyers saying that the mortgage interest and property tax deductions are “extremely important” in their decision to purchase a home. When broken out by income levels, the findings were similar across all income levels, with 80 percent of those earning less than $100,000 annually; 78 percent earning between $100,000-$199,999, and 81 percent earning more than $200,000 annually saying the deductions were “extremely important” in their buying decision, respectively.
“The mortgage interest deduction plays an important role in buyers’ monthly budgeting. Without this tax advantage, housing affordability would be negatively impacted and potentially price out many would-be buyers,” according to C.A.R. President Don Faught.