More Americans believe that now is a good time to purchase a home.
Consumer opinions about home buying bounced back in the first quarter of 2019, with 37 percent stating that they strongly believe now is a good time to buy, up from 34 percent in the last quarter of 2018, but down from 38 percent one year ago, according to a survey from the National Association of Realtors.
Only 35 percent of respondents said that now is not a good time to buy a home, compared to 37 percent in 2018's fourth quarter.
NAR's first quarter Housing Opportunities and Market Experience survey determined that a majority of those polled, 53 percent, said that the economy is improving--down from 59 percent 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. Fifty percent of Generation X said the economy is improving, while 42 percent of urban area residents reported the same.
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NAR's says several factors are helping to improve the attitudes of potential homebuyers. "First, inventory has been rising, so those buyers interested in making a purchase will not be limited in choices,” said Lawrence Yun, chief economist at NAR. “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 percent of respondents said they think home prices in their communities have increased over the last 12 months; a drop from 63 percent in 2018's fourth quarter. Thirty-one percent 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. Forty-three percent said they expect prices in their communities to stay the same over the next six months, up 2 percent from last quarter. However, 47 percent believe prices will rise in the coming six months, while 10 percent 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. The West is experiencing the most variation in expectations surrounding home prices.
"A high percentage 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," said Yun. "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 percent believe it would be very difficult to qualify for a mortgage given their current financial situation; 28 percent said it would be somewhat difficult to qualify. Twenty-four percent of that group said they expect no difficulty at all in qualifying for a mortgage; up significantly from 21 percent last quarter and 19 percent this time last year.
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," said Yun. "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."
