A different picture of the housing market is presented by data from an April survey of just over 1,000 Americans. In contrast to more upbeat recent reports, including from Freddie Mac as reported here last week, the ValueInsured Housing Confidence Index for the second quarter dropped almost five points to its lowest level since the inception of the index in Q1 2016.
High home prices, unaffordability cause confidence in housing health to drop to lowest levels in nine quarters since inception of ValueInsured’s Modern Homebuyer Survey
The desire to own a home remains high, currently at 79 percent among non-homeowners, however; 67 percent believe the American housing market is unhealthy, according to the latest ValueInsured quarterly Modern Homebuyer Survey. In addition, the number of people who believe buying a home today is a secure and smart investment dropped to 52 percent. Despite reports of a strong sellers’ market, the decline in confidence is significant across the board among homeowners and non-homeowners alike.
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Despite consumer demand for housing remaining high, homebuyers' confidence in their ability to save enough for a down payment fell in the first quarter, with some feeling less positive than others.
Millennials in particular saw declining confidence toward down payment affordability, with only 35% of millennial first-time homebuyers claiming they can afford a down payment, according to ValueInsured, a Dallas-based down payment insurance company. This is down nine percentage points from a year ago.
Despite an active Spring buying season, only 61% of homeowners say that the housing market is heading in a good direction “for people like me.” But why? Regardless of other positive or negative news surrounding market excitement or that it is a great time to buy or sell, first-time and upgrade buyers are still viewing the market with trepidation highlighted by a few key areas. This and other findings will be released next week as part of our latest housing sentiment survey - the quarterly ValueInsured Modern Homebuyer Survey.
Anyone who has come across a “Home Buying for Dummies” or “Investment 101” type book or website should be able to recite this golden rule: don’t try to time the market. While applicable to most investors, this is likely truer for homebuyers, who need a place to live and probably shouldn’t wait. Increasingly, however, they appear to be deviating from the advice.
Perhaps the real surprise – homebuyers are not alone. Homeowners are also growing concerned with timing the market, according to ValueInsured’s latest Modern Homebuyer Survey…
According to ValueInsured’s Q1 2018 Modern Homebuyer Survey, 62% of interested first-time homebuyers – including 65% of Millennials – who plan to buy “in the near future” are concerned they cannot afford a down payment on a home they would like to live in.
But if you think the affordability challenge is exclusive to non-homeowners who wish to enter the elusive homeownership rank, think again. According to ValueInsured’s latest survey on American homebuyers’ confidence and sentiments, even existing homeowners are not immune.
We admit it, this headline may be a bit sensational; but if you consider the latest homebuyer reports, it may not be that far-fetched after all.
In 2017, 35% of all homebuyers made an offer on a home sight unseen, according to a Redfin report. The fear of missing out in some hot housing markets seem to have turned more otherwise rational, responsible Americans into risky homebuyers. Throw in sales contracts that also waive home inspections in order to win bidding wars, then yes, in essence, a sizeable number of desperate homebuyers have now been reduced to pretty much buying blind.
But that’s not the whole story. The latest ValueInsured Modern Homebuyer Survey revealed that some homebuyers are also planning a purchase without having basic understanding of new tax laws, interest rate trends and how home value in the areas where they are shopping could potentially be affected.
The MBA forecasts refinance volume will decline by 30% in 2018. In other words, while homeowners have a lot more equity at their disposal, fewer will be accessing that available cash. Why?
Amid CoreLogic’s monthly reminders that nearly half of the nation’s top housing markets are overvalued, Fannie Mae’s latest HPSI continues to report housing sentiment “volatility”. According to Fannie Mae’s survey, the net share of respondents who believe home prices will go up in the next 12 months decreased 3 percentage points in March. The latest ValueInsured Modern Homebuyer Survey echoes the same cautiousness in home price sustainability, particularly among homeowners.