Survey finds optimism about home buying

11/06/2014

Survey finds optimism about home buying

IRVINE, Calif. – Nov. 5, 2014 – A survey conducted on behalf of Prudential Real Estate, the third quarter Consumer Outlook Survey, finds that consumer optimism could lead to a stronger close for real estate in 2014.

According to the survey conducted online by Edelman Berland, 78 percent of all respondents have a favorable view of the real estate market. That's consistent with the past three surveys, and up 26 percentage points since the survey was first conducted in 2011.

A full 82 percent said housing is moving in the right direction, a 3-percentage-point jump from the first quarter.

Nearly 70 percent of likely homebuyers said the remainder of the year is a more ideal time to buy or sell, and 72 percent of all respondents expect more competition for homes.

Millennials, roughly 80 million strong in the U.S., displayed the highest favorability of the housing market at 85 percent. This group is most optimistic about housing's opportunities heading into the remainder of the year.

"Our data shows people understand the opportunities in housing now and, because they feel better about their personal situations, many say they are ready to capitalize," says Earl Lee, CEO of HSF Affiliates LLC.

First-time homebuyer and seller activity – held down by housing-inventory shortages, rapidly rising home prices and available of mortgage financing – also may pick up. Fifty-six percent of the survey's recent transactors said they were first-time homebuyers or sellers. Another 31 percent of likely transactors indicated they were in the market for the first time.

  • This could indicate the start of an important trend," says Stephen Phillips, HSF Affiliates COO. "Younger Americans seem to be gaining confidence in housing as the economy improves. Pent-up housing demand caused by the Great Recession may be starting to loosen."
  • 58 percent of respondents said "lower interest rates" was the No. 1 reason they're attracted to real estate now, and 62 percent said they were considering transactions before interest rates rise. The latter represents a 13-point jump from the first quarter.
  • Nearly 75% of respondents believe interest rates will rise in the near future.
  • Nearly half of all respondents believe it will be easier to secure mortgage financing as 2014 comes to a close – a 2-point gain over the first quarter.

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