More Consumers Say Now Is a Good Time to Buy a Home
New findings from a National Association of Realtors® survey show that consumer opinions about home buying bounced back in the first quarter of 2019, with 37% stating that they strongly believe now is a good time to buy, up from 34% in the last quarter of 2018 but down from 38% one year ago. Only 35% of respondents said that now is not a good time to buy a home, compared to 37% in 2018’s fourth quarter.
NAR’s first quarter Housing Opportunities and Market Experience (HOME) survey
also found that a majority of those polled, 53%, said that the economy is improving – down slightly from 59% at the end of last year. In 2019, optimism is the greatest among those who earn $100,000 or more and those who reside in rural areas.
50% of Generation X said the economy is improving, while 42% of urban area residents reported the same.
NAR’s chief economist Lawrence Yun said several factors are helping to improve the attitudes of potential home buyers. “First, inventory has been rising, so those buyers interested in making a purchase will not be limited in choices. Additionally, more stable home price trends are leading to more foot traffic at various open house gatherings.”
Quarter four of 2018 broke the trend for respondents who thought home prices had been steadily increasing over the last 12 months. The first quarter of 2019 followed that trend, as 61% of respondents said they think home prices in their communities have increased over the last 12 months; a drop from 63% in 2018’s fourth quarter. 31% said prices within their community had remained the same, unchanged from a year ago.
This quarter’s survey asked respondents to look ahead regarding local housing prices in the near future. 43% said they expect prices in their communities to stay the same over the next six months, up 2% from last quarter. However, 47% believe prices will rise in the coming six months, while 10% believe prices will drop in the next six months. Those who live in the Northeast and South, those who earn $50,000 to $100,000, or those who rent are most likely to believe prices will increase in their communities.
Yun said the West is experiencing the most variation in expectations surrounding home prices. “A high%age of the Western population believes that prices increased in the past year, while – possibly for the same reason – a higher segment from the West compared to other regions say prices could fall in the next 12 months,” Yun said. “As to the broader economy, the perception is weaker and showing cracks in the Midwest.”
Amid those polled who do not presently own a home, 27% believe it would be very difficult to qualify for a mortgage given their current financial situation; 28% said it would be somewhat difficult to qualify. Twenty-four% of that group said they expect no difficulty at all in qualifying for a mortgage; up significantly from 21% last quarter and 19% this time last year.
Nonetheless, Yun noted that mortgage affordability in 2019’s first quarter has been more favorable for would-be homebuyers than it has been in recent quarters. “The Federal Reserve’s decision to refrain from any foreseeable rate hikes was beneficial to potential buyers,” Yun said. “That move directly contributed to mortgage rates declining in quarter one, which provided a second-chance opportunity to those looking to buy who were priced out last quarter.”
From January through March, a sample of U.S. households was surveyed via a random-digit dial, including a mix of cell phones and landlines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report representing a total of 2,710 household responses.