While President Donald Trump’s poll numbers may be slipping, he is still injecting confidence in the economy and real estate among a core group of faithful supporters. According to a report by Forbes, multiple years of uninterrupted job gains and hope that the best is yet to come in 2017 are igniting consumer confidence across the country, and especially in rural and middle America. These statistics were the result of a new survey by the National Association of Realtors. The quarterly Housing Opportunities and Market Experience (HOME) survey additionally found a growing disparity among renters who think it’s a good time to buy and homeowners who think it’s a good time to sell. NAR Chief Economist Lawrence Yun says the surge in positive sentiment about the economy is primarily from respondents living in the Midwest (67 percent; 51 percent last quarter) and rural areas (63 percent; 43 percent last quarter).
“Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now. Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big decisions like buying a home. These positive developments would be especially good news for prospective homebuyers in the more affordable Midwest region.”
And the survey also finds that an increased confidence in the economy is also boosting feelings about households’ financial situation. The HOME survey’s monthly Personal Financial Outlook Index 2 showing respondents’ confidence that their financial situation will be better in six months, jumped to its highest reading in the survey, climbing to 62.6 in March from 59.8 in December 2016. Moreover, most households now believe it is a good time to purchase a home. Renters are a little less confident. Fifty-six percent of renters said now is a good time to buy, which is down both from last quarter (57 percent) and a year ago (62 percent). Eighty percent of homeowners (78 percent in December 2016; 82 percent in March 2016) think now is a good time to make a home purchase. Yun also noted that inventory conditions are worse than a year ago and home prices and mortgage rates are on an uphill climb.
“These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow. Unless there’s a significant boost in supply levels this spring, these constraints will unfortunately slow or delay some prospective buyers’ pursuit of purchasing a home.”
Particularly in the West, an increasing number of homeowners see the current market conditions as favorable for selling. One promising trend that could alleviate supply shortages is the notable bump in the share of respondents this quarter who believe now is a good time to sell a home. Sixty-nine percent of homeowners think now is a good time to sell, which is up from last quarter (62 percent) and a year ago (56 percent). NAR President William E. Brown, a Realtor from Alamo, Calif., pointed out that while homeowners may be motivated to trade up or move down this spring, it is important that they plan carefully and make sure they have experts on their side.
“Demand far outpaces supply in many parts of the country right now, which means homeowners will likely sell their home much quicker than the time it takes to buy another. Before listing, it’s best to have a carefully crafted plan in place. In addition to assisting in the hunt for a new home, a Realtor is an invaluable negotiating partner in the common situation where a buyer’s new home purchase is contingent upon selling their property currently up for sale.”