Considering a home is the most valuable asset in most American households, it’s logical to assume homeowners have strong affinity and appreciation for those who help safeguard this asset. However, a latest study shows homeowners have lukewarm opinions of their agent, with over 4 in 10 expressing unflattering or indifferent attitudes toward those who advise them on how to protect their home.
With rising home prices and mortgage rates, millennial homeowners are staying longer in their starter homes, many against their wishes to upgrade. According to the latest ValueInsured Modern Homebuyer Survey conducted in Q3 2018, 85% of all millennial starter-home owners wish to sell and upgrade to another home, but 78% are hesitant and have not made the move as they worry they could be buying high.
Ten years after the financial crisis, U.S. unemployment rate has dropped from an alarming 10% to the current level of 3.9%, a near-record low. However, the encouraging statistic may not necessarily translate to caution-free spending, at least not when it comes to buying a home. A latest survey of potential homebuyers suggests job insecurity is one of the most-cited reasons that keep Americans from pursuing the home of their dream.
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.
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.