Americans are “cautiously optimistic” about the housing market, with 69 percent recently surveyed by ValueInsured believing 2017 will be a better year for real estate than 2016, and 52 percent believing housing will become more favorable under the Trump Administration.
The outlook is primarily felt among millennials who are not homeowners. According to the survey, 62 percent of millennials believe the housing market will turn in their favor this year, while the level of confidence held by millennial non-homeowners has gone up the most in the past quarter, to a score of 61.3 in the ValueInsured Housing Confidence Index. (The Index is based on a 100-point scale.) The Index overall, however, has trended downward to 68.0 since September 2016—the first decline since March 2016, driven largely by homeowners.
The sentiment comes in contrast to the drop in share of first-time homebuyers who plan to purchase a home during the spring real estate season this year. A recent report by realtor.com® reveals the percentage of first-time homebuyers who plan to enter the housing market this spring has gone down 10 percent since October 2016—before the presidential election—due to concerns over higher mortgage rates. Mortgage rates rose for the first time in 2017 last week, after falling since the start of the year.
Forty-four percent of millennial non-homeowners in the survey are also confident they can afford a down payment, and 41 percent are expecting it to be easier to buy a home. Research out of Freddie Mac bears out a related trend, showing 40 percent of millennial non-homeowners are making saving for a down payment a priority. (Affording the ideal 20 percent—which ensures better mortgage loan terms—remains elusive.)
Attitudes toward home value, as well, have shifted, with homeowners feeling less confident home prices in their market will rise and their homes are worth what they paid for them, according to the survey. Zillow reports home values grew at an annual rate of 6.8 percent in December 2016.
Still, with the new administration, more than three-quarters of those surveyed believe owning a home is essential to the American Dream, and buying a home, ultimately, is better than renting one.
Courtesy of RISMedia.