Though consumers are optimistic about the economy and their own personal financial situations, more are expressing anxiety about their ability to buy a home, save for a down payment, and qualify for a mortgage, according to the National Association of REALTORS®’
Housing Opportunities and Market Experience (HOME) survey for the first quarter of 2018.
The share of consumers who are confident about buying a home edged down to 68 percent in the latest survey—which is based on responses from about 2,000 people—from 72 percent in the previous quarter and is now at the lowest level in two years. Renters are the least optimistic: 55 percent say now is a good time to buy a home compared to 60 percent in the previous quarter. They perceive the top barriers to homeownership to be
saving for a down payment and qualifying for a mortgage, stemming from concerns about future incomes, student loan debt, and having a low credit score, according to the survey.
Meanwhile, current homeowners, older consumers, and those living in more affordable housing markets in the Midwest and Southern regions express the most optimism about buying. “The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers—especially first-time buyers—to overcome,” says NAR Chief Economist Lawrence Yun. “Adding more fuel to the affordability fire is the fact that
mortgage rates have shot up to a four-year high in just a few months. Many house hunters are telling REALTORS® that they are dispirited by the stiff competition for the short number of listings they can afford.”
On the other hand, the share of homeowners who say now is a good time to sell increased to 74 percent in the latest survey, versus 69 percent a year ago. “There’s no question that a majority of
homeowners have amassed considerable equity gains since the downturn,” Yun says. “Home prices have grown a cumulative 48 percent since 2011 and are up 5.9 percent through the first two months of this year. Supply conditions would improve measurably—and ultimately lead to more sales—if a growing number of homeowners finally decide that this spring is the time to list their home for sale.”
Households overall are feeling better about the economy. Sixty percent of consumers surveyed say they believe the economy is improving compared to 52 percent in the fourth quarter of 2017. Homeowners living in the South and in rural areas are the most optimistic, according to the survey.
“The jump in optimism to start the year can be attributed to the robust job creation in most of the country, as well as the larger paychecks households are enjoying because of faster wage growth and the recent tax cuts,” Yun says. “These three positives should further ignite buyer demand. However, several metro areas with the healthiest labor markets also have the most severe supply and affordability pressures. This troublesome reality is what’s dampening moods and keeping many would-be buyers at bay.”
Source: National Association of REALTORS®
