Home prices are rising and inventory is low—sound familiar? That fact has been talked about nearly to death, but it’s for good reason. Though it means that housing confidence is up and on a positive trajectory, it also means for certain areas that we could be headed for a correction.
Eight in 10 American’s, or 79 percent, say that homeownership is still a part of the American Dream, which is why ValueInsured has ranked the Housing Confidence Index score at 68.7 on a hundred-point scale. However, the expectation that homes will continue on their value path has decreased significantly.
According to ValueInsured, 57 percent of the American homeowners that were surveyed think their area is overvalued and home prices are unsustainable. Since last quarter, that is a 7 percent increase. Homeowners in Urban areas are particularly concerned with 65 percent believing that homes are overvalued and unsustainable.
“We see more homebuyers concerned with timing the market,” said Joe Melendez, CEO of ValueInsured. “This is especially true for millennials, who are more likely to switch jobs, relocate or need to upsize in the next few years. No one wants to buy at the peak and find themselves underwater as so many did a decade ago.”
Overall, 62 percent of those surveyed think there will be another housing bubble, but there are five states that could especially be on the road to correction. Seventy-one percent of those surveyed think Washington is the number one place headed for correction followed by New York (68 percent), Florida (63 percent), California (59 percent), and Texas (58 percent).
“Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market,” said Melendez. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.”
To read the full report, click here.