It depends on where they serve. According to ValueInsured’s Modern Homebuyer Survey conducted in Q3 2018, nearly 7 out of 10 (69%) urban homeowners in America today do not expect their local firefighters and teachers to be able to afford to buy a home near where they serve.
2017 has been called the most competitive home-buying season ever and the strongest seller's market ever. However, recent reports tell a different story. In San Diego, 20% of all listed homes had a price cut in June. In Seattle, where bidding wars had become the norm in the past three years, market watchers are starting to see 6-figure price drops for median-price homes. In Dallas, 19% of all listed homes had seen their prices cut at least once in June. These are previously unheard off in recent years. Homeowners, who are typically more informed and aware of the latest market conditions in their neighborhood compared to new homebuyers, appear to have taken note according to the latest ValueInsured Modern Homebuyer Survey.
In the latest ValueInsured Modern Homebuyer Survey conducted in Summer 2018, 65% of all American homeowners believe the housing market is near its current cycle peak and 63% believe there will be a price correction in their area within two years – the highest levels recorded for both measures since the inception of the quarterly national survey in Spring 2016.
Given that similar correction concerns have been reported recently by The Washington Post, CNBC, Bloomberg, and Forbes, among many others, this declining homeowner confidence in home value sustainability is not news. What has not been examined more closely, however, are the potential catalysts for the pending correction.
America's attitude towards home-ownership is changing. Only 48 percent of millennials (age 21-36) believe that buying a home is a good investment, according to the latest ValueInsured Modern Homebuyer Survey. That's a record low, according to the report, and a sharp contrast to the previous high of 77 percent just two years ago.
In ValueInsured’s latest Modern Homebuyer Survey, millennial homeowners reported concerns for housing overvaluation, and rising pessimism for home price futures. One would expect millennial homeowners – being in the enviable position of owning in this seller’s market – to rejoice at rising home prices, but their reported sentiments tell an opposite story. Any rise in their home equity wealth on paper is negated by their concern for a pending correction, and the worries that they could be “buying high” if they were to upgrade now. The result? inventory shortage particularly for starter homes.
"Wealth in 2016 of the median family headed by someone born in the 1980s remained 34 percent below the level we predicted based on the experience of earlier generations at the same age," the authors write. "The corresponding shortfalls of the 1960s cohort (–11 percent as of 2016) and the 1970s cohort (–18 percent) are worrying but are much smaller than their respective 2010 and 2013 shortfalls."
The study found that the typical millennial family lost ground between 2010 and 2016, falling even further behind the typical wealth life cycle. The authors say this represents a missed opportunity because asset appreciation is unlikely to be as rapid in the near future as it was during the recent period.
Perhaps because of this trend, millennials’ view of buying a home has turned negative, according to a survey by ValueInsured. In the third quarter of this year, only 48 percent of all millennials said buying a home in America today is a good investment, a record low.
That's down from 54 percent in the second quarter. The previous high was 77 percent two years ago.