Is now a good time to buy a home? Is now a good time to sell? Although real estate markets go through cycles, there will always be people who need to move. But whenever possible, most consumers try to move when they think the market conditions will favor them. Consumer confidence and perceptions play a big role in shaping the market movement.
GOOD TIME TO BUY A HOME
Prices have been rising for several years. In the third quarter of 2018, 63% of U.S. consumers believed that now is a good time to buy a home. While that number is still above half, it’s been falling since 2015.
Across all demographics, the majority of consumers still feel that now is a good time to buy. But those who are currently renting, living with someone else, under age 34, or living in urban areas are less confident. Those demographics generally describe the largest population of first-time new home buyers a.k.a. millennials.
The Midwest scored highest in terms of consumer confidence with 67% of buyers indicating that now was a good time to buy. The Western region was the lowest at 55%. Affordability is a big factor. The fewer property options consumers think they can afford, the less likely they will be to try become active in the market.
GOOD TIME TO SELL A HOME
Home prices have been on the rise since 2011. As they continue to rise, increasing numbers of homeowners are looking to sell. Seventy-seven percent of U.S. consumers believe that now is a good time to sell. That is the highest since 2015 and is up 14% from the 3rd quarter of 2016. As seller confidence rises, more listing inventory is becoming available.
Both buyers and sellers should keep an eye on these trending mindsets. In western markets like California, respondents to the poll were most likely (85%) to think that now is a good time to sell. This is also the region where the fewest consumers think it’s a good time to buy. The Midwest markets usually follow behind the coastal trends.
Final Thoughts:
1. Sellers who will be buying a replacement home wear both hats.
2. Rising interest rates reduce both buyer affordability and seller profits. How do forecasts of continued rising rates impact their positions?