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FEATURE ANALYTICS The Confidence Contagion Borrower confidence is catching on, but is the swell in consumer sentiment based on what's real or an ideal? By Abby Gregory and Ryan Schuette L 64 | TH need two things: ignorance and confidence." And iterary icon Mark Twain was known for his humor, and when asked about his own lofty accomplishments as an author, he once quipped, "To succeed in life, you though the nation's housing recovery is no laugh- ing matter, Twain's comedic quote is easily appli- cable to recent industry reports indicating gains in consumer confidence. economy, major trouble in Europe, and an approaching elec- tion that's sure to create further instability, consumers remain committed to an optimistic outlook. In fact, a second-quarter survey from Brookfield Real Estate and Relocation Affiliates, Inc., showed that 72 percent of survey respondents reaffirmed their belief that the real estate market will recover during the next two years. Additionally, 69 percent of Despite a sluggish national those participating noted they continue to regard real estate as a key investment even though the market is "volatile," and according to Brookfield's data, THE M REPORT that's 6 percent improvement quarter-to-quarter. But does the rise in positive sentiment stem from fact or fiction? It's likely that both play a significant role in consumers' feelings on housing. Proof Positive I Palisades Media Ventures and Penn Schoen Berland—the team behind Brookfield's study—conducted interviews with 1,250 Americans who were in the market for a home sale or purchase in late May and early June (the data includes a n attempting to establish a firm answer to that question, margin of error of plus or minus 2.8 percent). Most potential borrowers findings, however, may be the statistics regarding the "emo- tions" of homeownership. The survey made it clear that the catalysts driving borrowers into a home have not wavered and continue to be based on per- sonal and financial control of the household, as well as neighbor- hood safety. "The American Dream is ownership, 78 percent of the respondents called it "very important," while 98 percent replied that it is only "somewhat important." A near majority also admitted they believe the market favors first-time buyers, thanks to historically low interest rates. Brookfield's most important clearly on the mend," Earl Lee, president of Prudential Real Estate, said in a statement. "Americans are feeling better seemed to feel favorably about the housing market, and the survey showed that 64 percent, or nearly two-thirds, believe that housing is on the mend, a jump from 52 percent year-over-year. Asked how they view home- about homeownership and the ongoing recovery taking place in residential real estate. Many are increasingly optimistic about their personal circumstances and, with housing affordability near all-time highs, they want to act on the opportunity." Rising to the Challenge A homeownership and the likelihood of a full recovery, respondents did admit that the market in general feels more challenging. The study revealed that 65 lthough overwhelmingly positive about percent of participants said they felt that mortgage financing seems more difficult than before the crisis, up from 58 percent from the first quarter. Thirty-nine percent of respon- dents considering a real estate transaction admitted to feeling uncertain about whether they could sell their current homes, an increase by 11 points from the first quarter and 10 points year- over-year. SECONDARY MARKET ANALYTICS SERVICING ORIGINATION