Prudential Real Estate, part of the HSF Affiliates LLC family of real estate brokerage franchise networks, released this week the results of its third quarter Consumer Outlook Survey indicating that consumer optimism may lead to a stronger close for real estate in 2014.
According to the survey, 78 percent of all respondents have a favorable view of the real estate market, consistent with the past three surveys and up 26 percentage points since the survey was first conducted in 2011. A full 82 percent says housing is moving in the right direction, a 3-percentage-point jump from Q1.
Consumer optimism, combined with awareness of historically low mortgage rates, rising home prices and other favorable factors, may bring more consumers to market before year-end. Nearly 70 percent of likely transactors say the remainder of the year is a more ideal time to buy or sell, and 72 percent of all respondents says there will be 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.
“Consumers may be shopping for more this holiday season and homes may likely be on their list,” says Earl Lee, CEO of HSF Affiliates LLC. “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.”
First-time homebuyer and seller activity, held down by housing-inventory shortage, rapidly rising home prices and availability of mortgage financing, also may be picking up. Fifty-six percent of the survey’s recent transactors say 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.”
Low Rates, Sound Guidance
A full 58 percent of respondents says “lower interest rates” was the No. 1 reason why they are attracted to real estate now, and 62 percent says they were considering transactions now before interest rates rise. The latter represents a 13-point jump from the first quarter. And nearly three-quarters of all respondents believe interest rates will rise in the near future.
However, 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.
“Homeownership is alive and well, available at attractive pricing in many markets,” says Gino Blefari, incoming CEO of HSF Affiliates. “It’s up to agents to pinpoint these opportunities, navigate the challenges and help clients achieve the American Dream.”
With markets and rates fluctuating, the majority of respondents highlighted the importance of professional guidance in the real estate process. Among likely transactors and contemplators, 83 percent says a real estate agent has been helpful in the early stages of the process and, of those who have not hired a real estate agent, 86 percent plan to hire one in the future.
For more information, visit www.prudentialrealestate.com.