According to the results of the Consumer Outlook Survey which were recently released by Prudential Real Estate, consumers are becoming increasingly positive over their perception of the real estate market. This follows a long hard winter, but now more people feel confident about their ability to make a successful real estate transaction this spring or summer.
The survey was reported in RISMedia, and shows 77% of respondents had a favorable view of the housing market, a 12 point increase compared to a year earlier. Millennials were the most optimistic group, with 85% feeling confident. This is a particularly good sign as it shows more first-time buyers and younger buyers and sellers are thinking about moving this spring or summer. Results also showed more people were becoming focused on home ownership, as nearly 70% felt more committed towards buying or selling a property now, a 6 point increase compared to the end of last year.
Real estate experts point out that consumers understand house prices are currently still attractive, especially as mortgage rates remain at near historic lows. However the recent hard winter extended into spring and meant many couldn't do anything about planning a home move. This survey shows there is pent-up demand and increasing motivation to move home. Real estate agents are anticipating things will get busier as inventory levels increase and loans become easier to obtain.
Some 78% of buyers thought it would be easier to buy a home this spring as more home buyers want to sell, and 72% feel encouraged by the improving economy. Some 63% of sellers are also motivated by a better economy, and feel that buyers are more interested in purchasing a property following the hard winter. More people also feel this momentum will carry through from spring into summer as the economy continues to steadily grow, giving everyone more confidence in their ability to buy a home. Housing affordability is still pretty good in most areas of the country, and buyers and sellers want to capitalize on this fact.
However rising home prices are cited as one of the top reasons as to why it might be more difficult to buy a home right now. There are also concerns that pent-up demand could create more competition for existing homes, and people also worry about rising interest rates. This could be one reason why 83% intend to buy a home sooner rather than later, before interest rates begin to rise.