Prudential Real Estate, an HSF Affiliates LLC real estate brokerage network, recently released the results of its first quarter Consumer Outlook Survey indicating that consumers’ perception of the residential real estate market is increasingly positive. And, following a long, tough winter, consumers nationwide believe this spring is an opportune time for real estate; most are confident they can make a successful real estate transaction this season or in summer.
Overall, 77% of consumers have a favorable view of housing, a 12-point jump from a year earlier. Millennials showed the highest favorability toward residential real estate at 85%, a sign that first-time and younger buyers and sellers are positioned to make their move this spring. Respondents also indicated they are increasingly focused on homeownership and its related opportunities: nearly 70% said they were more committed to buying or selling a home now, a 6-point increase from the year-end study.
“Consumers understand that home valuations remain attractive and mortgage rates are still near historic lows, but with the brutal winter that extended into spring around the country many really couldn’t do much about it,” said Earl Lee, president of Prudential Real Estate. “The optimism and enthusiasm we’re seeing through the survey underscores consumers’ motivation and pent-up demand. As more homes come to market and lenders ease their stringent underwriting guidelines, we anticipate busy times ahead in real estate.”
A full 78% of potential buyers said it will be easier to purchase a home this spring since “homeowners want to sell;” 72% are encouraged because “the economy is improving.” Sellers (63%), too, are buoyed this spring by the improving economy and their perception that buyers are motivated following the difficult winter. Interestingly, more respondents believe that spring momentum will carry into summer, marked by an 8-point jump vs. a year ago in those who view summer as the best time to buy a home.
“As the U.S. economy continues its slow, steady recovery more people are gaining confidence in their personal situations and are taking a longer look at homeownership’s possibilities,” said
Stephen Phillips, COO of HSF Affiliates. “With housing affordability still high in most areas of the country, potential buyers and sellers want to capitalize.”
In a twist on real estate’s ongoing recovery from the downturn, respondents cited higher-than-expected home prices as the top reason why it may be more difficult to buy a home now. In addition, 76% of consumers believe that pent-up demand will create even more competition for existing homes. And interest rates, which remain near historic lows despite a run-up during the past year, weigh on people’s minds. A full 83% said they plan on buying sooner vs. later before interest rates rise – that’s an 8-point jump from the year-end study.
With these opportunities and challenges at hand, 88% of respondents believe a quality real estate agent is important to their home buying or selling success.
“Real estate markets are in constant flux and tight lending guidelines only complicate the picture for many consumers,” said Lee. “Knowledgeable agents will help address these challenges and navigate the process, resulting in sound real estate decisions by consumers.”
Prudential Real Estate Outlook Survey Methodology
Interviews with 2,500 Americans who are “in the market” to buy or sell a home were conducted online by Edelman Berland in February 2014 and March 2014. Respondents are aged 25-64 with a household income of at least $50,000. The margin of error is +/-1.96% for all respondents.
For more information, visit www.prudentialrealestate.com for details.