The slight home price hike is partly why people are optimistic, expert says
More Americans showed optimism in selling and buying a home in the second quarter, the National Association of Realtors second quarter Housing Opportunities and Market Experience (HOME) survey revealed.
Almost half of survey respondents (46%) strongly believed that now is a good time to sell a home, up from 37% in the first quarter. The recent slight increase in home prices is a contributing factor to the belief, according to NAR Chief Economist Lawrence Yun.
"With home price appreciation slowing, home sellers understand that the days of large price gains from holding an extra year are over," he said.
Over a third (38%) of homebuyers also strongly agreed that now is a good time to purchase a home, while 27% moderately agreed. The percentage of the respondents who disagreed remained unchanged from Q1 2018’s 35%.
The survey also showed that 55% (up from 53% in Q1 2019) of the respondents think the economy is improving; more particularly, those who earn $100,000 or more and those who live in rural areas were the most optimistic in Q2 2019. Fifty-three percent of Gen-Xers, who have more financial pressure compared to other age groups, believe the economy is getting better.
"Many in the Generation X population find themselves needing to purchase multi-generational homes,” said Yun. “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."
There was also a slight jump in the percentage of people who said they believe home prices have increased within their communities in the past 12 months, up to 63% from 61% in Q1.
Respondents also predict home prices in their communities to stay the same over the next six months. However, 49% said they expect prices to rise.
People who do not currently own a home were not confident that they’d qualify for a mortgage, with 27% thinking that it would be very difficult due to their financial state and 30% saying that it would be somewhat difficult to get a mortgage.
"Lower mortgage rates, along with job and wage growth, will lead to an increase in sales and thereby contribute positively to economic growth in the upcoming quarters," Yun said.
