About 60 percent of homebuyers and homeowners express confidence in the U.S. economy, and 70 percent have a favorable view of the real estate market.- Sixty-eight percent of millennials feel pressure to buy a home due to rising interest rates, but most are willing to wait for the right property.
- Americans are more concerned with friendly neighbors than they are with home values.
Most Americans are optimistic about the current state of the economy and the real estate market, although potentially higher interest rates are causing some trepidation.
That’s according to Berkshire Hathaway HomeServices’ latest Homeowner Sentiment Survey, which found that more than 60 percent of prospective homebuyers and homeowners are satisfied with the U.S. economy, the highest since the survey’s inception in 2015. The vast majority of respondents from both groups cite the economy’s health as a key factor when making real estate decisions.
Also at a survey high is optimism about the housing market, with 70 percent of homeowners and 68 percent of prospective buyers holding a favorable view of U.S. real estate. About half of those polled say that today’s low interest rates and rising property values are the main reasons for their confidence. Additionally, increased home construction — particularly in urban areas with easy access to jobs — and wage growth are encouraging Americans that the time is right to invest in real estate.
Mortgage rates remain low by historic standards, with 30-year, fixed-rate loans averaging 4.02 percent for the week ended May 18, according to Freddie Mac. But the impact of rising rates is not lost on prospective buyers, particularly millennials, 68 percent of whom feel a sense of urgency to purchase a home before mortgage rates climb too high. More than half of millennial homebuyers say that the prospect of rising mortgage rates are discouraging them from buying a home.
Despite concerns over higher mortgage rates, 70 percent of potential millennial homebuyers plan to wait to buy the home that meets their current needs as opposed to a fixer-upper. To meet this demand, builders are constructing more new starter homes in 2017, although inventory conditions are currently tight for entry-level properties.
When asked about the most important neighborhood amenities, the survey turned up a surprise. Fifty percent of respondents say that friendly neighbors top their list of most-desirable community features, compared with 39 percent who cite home value and 37 percent who point to investment potential.
(Image: iStock/DNY59)