Selling perceptions improve in latest HOME survey
Following two quarters of declining optimism toward home selling conditions, people were more likely to consider it a good time to put a home on the market in the second quarter of 2019.
The Homeownership Opportunities and Market Experience survey, issued by the National Association of Realtors, found that 73 percent of people thought it was a good time to sell a home. The share holding this opinion had dwindled from 77 percent in the third quarter of 2018 to 73 percent in the fourth quarter of 2018 and 69 percent in the first quarter of 2019; the second quarter's share was down 2 percentage points from the previous year.
A majority of people have considered the market to be favorable to sellers in recent years due to rising home prices in many areas. However, Realtors have suggested that this trend caused some homeowners to keep their home off the market and wait for home values to climb higher. Recent market factors such as increasing inventory have helped to blunt price growth.
"With home price appreciation slowing, home sellers understand that the days of large price gains from holding an extra year are over," said Lawrence Yun, chief economist at the National Association of Realtors.
Respondents with a household income of $100,000 or more were most likely to believe it was a good time to sell, with 80 percent holding this view. Seventy-nine percent of homeowners and respondents from the West felt the same. By contrast, just 61 percent of respondents from the Northeast thought it was a good time to sell, along with 62 percent of renters, non-owners living with another person, and those with a household income of $50,000 or less.
Sixty-three percent said home prices in their community had gone up in the past 12 months, up from 61 percent in the previous quarter but down from 68 percent in the previous year. Seven percent said prices had decreased, down from 8 percent in the first quarter but a year-over-year increase of 2 percentage points.
Urban residents were most likely to say local prices were up, with 68 percent saying this was the case. Sixty-seven percent of those with a household income between $50,000 and $100,000 said prices were up, as did 66 percent of urban respondents. Just 55 percent of rural respondents and 56 percent of those from the Northeast reported home prices increases in the past 12 months.
Nearly half—49 percent—said they expect local home prices to go up in the next six months. This was up from 47 percent in the first quarter but down from 55 percent in the second quarter of 2018. Eight percent said they anticipate home price decreases, down 2 percentage points from the previous quarter but a year-over-year increase of 3 percentage points.
Millennials (ages 38 and under) were most likely to expect home price increases in their community in the next six months, with 53 percent holding this view. Respondents from the Northeast were least likely, with 41 percent anticipating higher home prices.
Sixty-five percent thought it was a good time to buy a home, unchanged from the previous quarter. This was down from 68 percent in the second quarter of 2018.
Homeowners and those with the highest incomes were the most optimistic about homebuying conditions, with 74 percent of each group considering it a good time to purchase a home. Just 43 percent of non-owners living with someone else thought it was a good time to buy a home, along with 51 percent of renters.
Forty-three percent said they did not think it would be difficult for them to qualify for a mortgage, down from 45 percent in the previous quarter and 46 percent in the previous year. Fifty-seven percent said they thought it would be difficult to qualify for a mortgage, up from 55 percent in the first quarter and 54 percent in the second quarter of 2018.
Seventy-one percent of non-owners living with someone said they thought it would be difficult to qualify for a mortgage, as did 69 percent of older baby boomers (ages 64 to 72) and 68 percent of those with a household income of $50,000 or less. The only group where less than half of respondents thought it would be difficult to qualify for a mortgage were higher earners; 23 percent of those with a household income above $100,000 thought they would have trouble with the process.
Fifty-five percent said they think the U.S. economy is improving, up from 53 percent in the previous quarter but down from 58 percent in the previous year. Those who were most likely to have a favorable outlook on the economy included respondents from rural areas (64 percent), those with a household income exceeding $100,000 (60 percent), and homeowners (59 percent). By contrast, 51 percent of those with the lowest incomes, 52 percent of urban respondents or renters, and 55 percent of non-owners living with someone thought the economy was not improving.
Among the age groups, Generation Xers (ages 39 to 53) were least likely to think the economy was improving, although 53 percent held this view. Yun suggested that these respondents may be seeing the most strain on their budgets.
"Many in the Generation X population find themselves needing to purchase multigenerational homes," he said. "Also, they may be feeling financial stress from caring for aging parents and children of all ages. Nonetheless, they have an optimistic outlook about the future."
The National Association of Homeowners' HOME surveys question approximately 900 households each quarter.
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