New findings out Thursday from the National Association of Realtors® show that 75% of those surveyed believe that now is a good time to sell a house, while 68% think it is a good time to buy.
That’s according to NAR’s second quarter Housing Opportunities and Market Experience (HOME) survey, which also found that a majority of consumers believe prices have and will continue to increase and that homeownership strengthens our nation’s communities.
Optimism that now is a good time to buy remains stagnant from last quarter; 39% strongly agree that now is a good time to buy, while 29% moderately agree. Among renters, however, those positive feelings have fallen significantly from 55% in the first quarter to 49% this quarter. Optimism is highest among older buyers (65 or over) and those living in the South and Midwest regions (73% and 71% respectively).
NAR Chief Economist Lawrence Yun said affordability and low inventory are eroding buyer confidence. “Inventory remains the driving force in real estate, affecting everything for rising prices to household formation. Improving supply conditions is critical to improving buyer optimism and helping to remove some of the barriers holding back potential first-time buyers.”
As home prices continue to climb across the country, the number of respondents who believe now is a good time to sell remains high with 46% strongly agreeing (up from 42% last quarter) and 29% moderately agreeing. 29% believe that now is not a good time to sell a home, and that drops to 19% for current homeowners.
“Hopefully this strong seller optimism will lead to an increase in inventory later on in the year,” said Yun.
Respondents were also asked about their perception of home prices in their communities. 68% believe that home prices have gone up in their area in the last 12 months, up from 63% last quarter. 55% also believe that home prices will continue to increase in their communities in the next six months, also up from the previous quarter (53%).
A near high of 58% of households believe that the economy is improving – slightly down from 60% last quarter but up from 54% last year. People in rural areas are more likely to view the economy as improving (63%) than in urban areas (51%).
The HOME survey’s monthly Personal Financial Outlook Index, showing respondents’ confidence that their financial situation will be better in six months, dropped slightly from 63.8 in March to 62.1 in June. A year ago, the index was 57.2.
46% of those surveyed say they do not believe it would be difficult to obtain a mortgage, up from 36% last quarter. “This is most likely a reflection of the current positive outlook on the direction of the economy,” said Yun. “Healthy job creation and faster wage growth mean that homeownership is viewed as a more attainable goal than it was a year ago.”
Homeowners and non-homeowners were asked if a high rate of homeownership strengthens a community. 67% of those surveyed said that homeownership strengthens communities a great deal, and that number jumps to 76% for current homeowners and 77% for those 65 and older.
“Homeowners are more likely to be involved and engaged in the issues facing their communities, since they tend to be more rooted in the area than renters,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “This involvement – homeowners are more likely than renters to vote, volunteer their time at local charities and support neighborhood upkeep – helps shape and strengthen our nation’s communities, as well as drive the national economy.”
Respondents were also asked if homeownership will be easier or harder to attain for future generations. 73% believe that it will be harder for future generations to purchase a home, compared to only 11% who think it will be easier. 74% of respondents 34 or under believe it will be more difficult to become homeowners.
