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May 24, 2017

Home Owner Sentiment Survey Results

by derekespeer

Homeowner Sentiment Survey.Fact Sheet.Wave 7.Final

 

Summary

Consumer sentiment toward the U.S. economy and real estate market increased across all age groups, surging to the highest levels seen since the survey’s inception.

  • U.S. economic satisfaction and real estate market favorability rose across all generations when compared to December 2016 (our last wave of the survey).
    • Millennial views on the economy jumped 13 percentage points (62% to 75%), the largest increase among all age groups.
  • Satisfaction with the U.S. economy and real estate market was the highest seen since the survey began in 2015.
  • Current homeowners said that lower interest rates were the top reason (49%) they felt favorable to the real estate market.
    • The increasing value of real estate (43%) was the No. 2 reason.
  • Prospective homebuyers who had a favorable view of the real estate market said that increased construction in urban centers was a key reason for their favorability.
    • Part of this favorability is because urban construction leads to housing options that close to jobs.
  • Market optimism found in the survey is in line with recent economic indicators, such as increases in employment and wage growth. (Source: Reuters)

 

While respondents, mainly Millennials, showed overall confidence in the market and a desire to wait and find their dream home, they also expressed concerns about rising interest rates.

 

  • A majority (68%) of prospective Millennial homebuyers said they feel a sense of urgency to buy a home because interest rates are rising.
    • One in five prospective Millennial homebuyers also said they have a desire to buy a home before rates increase.
  • Despite higher favorability toward the real estate market, a slight majority of Millennials still reported feeling discouraged from buying a home due to rising interest rates.
    • Even though rates may rise, a majority (72%) of prospective Millennial homebuyers still said that they are willing to wait to buy their dream home.
  • Key Takeaways:
    • Although the idea of a rate hike can grab headlines and create some unease, it’s important to remember rate increases are often the mark of the Fed’s belief in the strength of our improving economy.
    • While rates may not feel low to a generation of first-time buyers who haven’t seen many meaningful rate hikes in their adult lives, the cost of borrowing money to buy a home remains near historical lows.
    • Millennials recognize the benefits of entering the market before interest rates rise further, but still want to wait to find their dream home, creating a strong case to
    • promote finding the right agent who will help navigate the current environment to achieve homeownership goals.

 

When considering a top neighborhood feature, friendly neighbors was the surprising top choice, ahead of even financial considerations.

  • In a surprising twist, prospective homebuyers ranked friendly neighbors (50%) ahead of financial concerns such as the accurate market value of a home (39%) or confidence that the home will be a good investment in the future (37%).
  • Other highly ranked neighborhood characteristics ranked highly in Wave 7 included walkability (45%), and a good school district (41%).
  • For Millennials, proximity to jobs, family, and the feeling of a strong sense of community were also important factors when looking at a neighborhood.
  • Key Takeaway:
    • Think beyond size and budget when searching for your dream home, a local agent who is invested in the community can help buyers find a home that meets their financial and emotional needs.
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