The Day – Fewer respondents expect home price growth in NAR survey
Less than half of the respondents in a recent survey by the National Association of Realtors said they think home prices in their community will go up in the next six months. The survey also reflected diminishing enthusiasm for homebuying conditions, although a majority still considered it a good time to purchase a home.
The Homeownership Opportunities and Market Experience Survey is issued quarterly and collects responses from approximately 900 households each month. The fourth quarter survey included a total of 2,710 responses from telephone interviews.
Sixty-three percent of respondents said they considered it a good time to buy a home, unchanged from the previous quarter but down from 72 percent in the fourth quarter of 2017. The share who said they strongly believe it is a good time to buy a home fell from 43 percent in the previous year and 39 percent in the previous quarter to 34 percent.
Respondents were most likely to consider it a good time to buy if they were living in a rural area (74 percent), 65 years old or older (72 percent), or if they currently owned a home (72 percent). Fifty-five percent of respondents who lived with someone but didn’t own a home thought it was not a good time to buy, along with 54 percent of respondents in the West and 52 percent of renters.
Sentiments toward selling remained steady, with 73 percent considering it a good time to sell a home – down 4 points from the previous quarter but up 2 points from the previous year. Forty-one percent strongly considered it a good time to sell, a drop of 9 points from the third quarter of the year and 2 points from the fourth quarter of 2018.
Eighty percent of respondents from the Midwest thought it was a good time to sell a home, along with 79 percent of households earning more than $100,000 and 78 percent of rural respondents, Western households, homeowners, and those earning $50,000 to $100,000. Respondents were most likely to consider it a bad time to sell if they were non-owners living with someone (42 percent), making $50,000 or less a year (37 percent), or living in the Northeast (36 percent).
“Consistently fast-rising home prices well in excess of income growth over recent years have left buyers frustrated while slowly enticing would-be sellers to consider listing,” said Lawrence Yun, chief economist at the National Association of Realtors.
The organization determined that median home prices in the United States increased by 44 percent between 2012 and 2018, while average hourly wages grew by just 16 percent in the same period.
Sixty-three percent said home prices have increased in their neighborhood in the past 12 months, down from 70 percent in the third quarter of the year and 64 percent in the fourth quarter of 2017. Thirty percent said prices have stayed the same, while 7 percent said they have gone down.
Price increases were most commonly reported by respondents in the West (76 percent), those making more than $100,000 (72 percent), and those between the ages of 45 and 54 (68 percent). Ten percent of respondents ages 34 and under reported price decreases in their neighborhood, along with 9 percent of renters.
Respondents were less likely to expect price increases in the near future. Forty-eight percent said they think prices in their neighborhood will increase in the next six months, down 5 points from the previous quarter and 3 points from the previous year. Eleven percent said they think prices will go down, up from 6 percent in both the previous quarter and previous year.
Urban and Southern respondents were most likely to expect ongoing price increases, with 53 percent of saying they think prices will continue to climb. Seventeen percent of respondents in the West said they expect price decreases, along with 16 percent of those ages 34 and under.
Fifty-nine percent said they thought it would be at least somewhat difficult for them to get a mortgage, unchanged from the third quarter but a year-over-year drop of 1 point. Forty-two percent said they thought it wouldn’t be very difficult or not difficult at all for them to get a mortgage.
The respondents most likely to consider it difficult to qualify for a mortgage were those between the ages of 55 and 64, with 79 percent saying they thought they would have trouble getting such a loan. Seventy-three percent of rural residents and 71 percent of those earning less than $50,000 felt the same. Seventy percent of respondents earning $100,000 or more said they didn’t think it would be difficult to qualify for a mortgage, along with 49 percent of those in the Northeast and 48 percent of those ages 35 to 44.
Fifty-nine percent said they believe the economy is improving, down 1 point from the previous quarter but a year-over-year increase of 9 points. Forty-one percent said they think the economy is not improving.
Respondents were most likely to have a favorable view of the economy if they were living in a rural area (71 percent), owned a home (62 percent), or earning $50,000 or more (61 percent). Those most likely to say they did not think the economy was improving were urban residents (48 percent), renting (46 percent), or earning under $50,000 a year (46 percent).