19 December 2017
Even with economic gains and employment growth, homebuyers and sellers are less optimistic about their prospects, according to recently released findings from a survey by the National Association of REALTORS® (NAR).
NAR’s quarterly Housing Opportunities and Market Experience (HOME) report reveals 60 percent of renters believe now is a good time to buy a home, up from 57 percent this time last year, but down from 62 percent last quarter. Seventy-six percent of homeowners, conversely, report now is a good time to list their home for sale, up from 62 percent this time last year, but down from 80 percent last quarter.
Cost and limited options are partly responsible, says NAR Chief Economist Lawrence Yun.
“The trifecta of faster economic expansion, robust hiring and low mortgage rates should be generating a surge in optimism and home sales as 2017 winds down,” Yun says. “Sadly, this is not the case. While overall demand remains high, it is not translating to meaningful sales gains. Too many prospective first-time buyers see few options within their budget and home prices that are rising much faster than their incomes. Until we start seeing a steady increase in new and existing inventory, sales will fail to deliver on their full potential and many would-be first-time buyers will be forced to continue renting.
“The good news for possible inventory gains heading into 2018 is the fact that a much larger share of homeowners compared to a year ago think it’s a good time to sell,” says Yun. “However, the decline in the latest quarter is worth monitoring. REALTORS® say the lack of new-home construction in their markets is giving many potential trade-up buyers hesitation about putting their home on the market out of fear they won’t find another property to buy. This indecisiveness only exacerbates tight inventory conditions and slows housing turnover.”
Consumers, doubly, are not as confident about the economy, the report shows. The report’s Personal Financial Outlook Index, which gauges survey respondents’ sentiment on their financial situation over the next six months, dipped to 59.1 in December from 62.0 in September.
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