Now is the time to buy, according to most Americans. In the second Housing Opportunities and Market Experience (HOME) survey conducted by the National Association of Realtors, 75 percent of participants believe now is a good time to invest in a home, with 44 percent stating strong positive beliefs in today’s market.
Those renting or cohabitating who are under 34 and living in urban areas with high home appreciation are hesitant, but 66 percent of millennials overall feel it’s a good time to purchase a home.
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Four in five current homeowners and individuals with incomes of over $50,000 also largely believe now is a good time to buy a home, with a majority of people over 65 and those in the Midwest feeling the same. And the good feelings extend across the buyer’s table, too, with 56 percent of participants believe now is a good time to sell in the U.S.
[graphiq id=”iZ3HGvPCNGl” title=”Percent of Population 65 and Over” width=”600″ height=”498″ url=”https://w.graphiq.com/w/iZ3HGvPCNGl” link=”http://places.findthehome.com” link_text=”Percent of Population 65 and Over | FindTheHome”]
Here are some more highlights from the HOME survey:
Midwest buyers most assured
The large majority — 80 percent — of Midwesterners believe now is the time to buy, and 60 percent think now is a good time to sell. The majority of those in the Midwest think home prices have stayed the same in the past 12 months at 45 percent, while 43 percent believe values rose, and just 12 percent believe they dropped.
Over the next 6 months, 40 percent of Midwest residents think prices will rise, while 51 percent think they’ll stay the same.
In the Midwest, the majority of people believe it’s somewhat difficult to qualify for a mortgage. The second highest group believes it’s very difficult, followed by not very difficult and not at all difficult.
Uncertain buyers, confident sellers in the West
Renters, particularly in the West, are apprehensive of buying at this time. While 68 percent of respondents from the West agree it’s a good time to buy, the region has the lowest confidence level compared with the rest of the country.
“They understand that it’s difficult to obtain a mortgage, and renters, especially those with lower incomes, are going to say that it’s not a good time to buy because they are feeling priced out of the market,” says Jessica Lautz, NAR managing director of survey research.
On the other hand, the most confident sellers reside in the West, with 66 percent of residents responding that it’s a good time to list — presumably because of high home values. In the West, 67 percent of residents believe their home values rose over the past year.
Residents located in the West are the most likely to believe their home values will rise in the next six months, with 55 percent agreeing and only 39 percent believing their property values will stay stagnant.
But, since property prices are high, people in the West are less confident in their ability to qualify for a mortgage, with 32 percent of participants believing it to be “very difficult” and 30 percent responding “somewhat difficult.”
Northeast least likely region to believe it’s a good time to buy
Although the Northeast has the lowest majority of people willing to purchase right now at 74 percent, it still represents a high bulk of confident would-be buyers. However, the majority of Northeast individuals believe it’s a bad time to sell at 53 percent. Coincidentally, 46 percent of respondents from the Northeast said their home prices stayed the same, while 42 percent said they rose over the past 12 months.
Those in the Northeast aren’t overly optimistic for the near future, either, with 52 percent responding home values will likely stay the same over the next six months and 39 percent stating they will rise. Only 9 percent think home values will drop in a half a year’s time.
The Northeast also had the highest number of respondents say obtaining a mortgage would be not at all difficult at 15 percent.
Southerners project static home prices
As is the national trend, the majority of people in the South (77 percent) share the belief that it’s a good time to buy a home, and a slight majority thinks it’s time to sell at 52 percent. In the South, 48 percent of people believe their home values rose over the last year, while 39 percent thought they remained the same, and 13 percent believe they dipped.
More notably, the majority of Southerners think their home prices will stay the same over the next six months at 47 percent of participants. At the same time, 42 percent of respondents think values will rise, and 9 percent see them dropping in the near future.
Most Southerners see qualifying for a mortgage as somewhat difficult.
Economic outlook among millennials
Affordability is the key factor for young, aspiring homebuyers. Millennials have the highest share of respondents at 60 percent who see the economy as progressing.
Overall, 48 percent of the country sees the economy improving, with the majority of rural individuals and participants over 65 with the least certainty in the national system.
The attitude toward the economy varies by location, too. The majority, or 57 percent, of those in urban areas see the economy boosting, while 51 percent in suburban regions perceive a receding economy.
Less emphasis on urban condos
Overwhelmingly, the most popular type of home respondents prefer is a single-family detached property, assuming they were to buy in the next six months.
“We’ve collected the data about what buyers actually do, what they are thinking about if they were to buy in the next six months. Absolutely, younger buyers would move to the larger sized home, and that’s possibly due to the desire to grow families or living with someone else,” Lautz said.
However, for those over 65, buying a smaller or similarly-sized home is preferred. Just 12 percent of respondents in the age group would go larger, and buyers over 65 who are currently renting would opt for a condo over a single-family residence.
“Older buyers tend to downsize as children go off to college, or if they get a divorce or become a widower,” Lautz said.
Only 39 percent of people currently living in an urban area would buy homes there. Forty-six percent would settle down in the suburbs, preferably closer to the city for an easy commute, or within 20 miles to the city center.
“We expect that millennials want to buy in an urban area, but those buying are growing up. It dovetails, and schools are becoming a bigger priority. They don’t want to be away from the city — commute is important, too,” Lautz said. “They want to be within 20 miles. This is true within all buyers across age spectrum.”
However, as NAR points out in their report, the supply of single-family homes is tight. In major metro areas, developers may be better off investing in the city where home values are high.
Single-family homes in the suburbs often don’t bring in the same prices multi-family condos in urban cities present. Still, the American Dream remains with young people who want detached dwellings outside of the city — yet there aren’t enough available in today’s market that fit budget constraints.
“While this is not a new discovery, supply and demand imbalances and unhealthy levels of price growth in several metro areas have made buying an affordable home an onerous task for far too many first-time buyers and middle-class families,” said Chief Economist of NAR Lawrence Yun.
