In its Real Estate Sentiment Index for the second quarter of 2017 it reveals that overall optimism for the real estate market increasing transactional volume is lower than a year ago but up 9% from the first three months of this year.
The increase was driven by the rise in expectations for both purchase transactions and refinance transactions amid persistent low mortgage rates,” said Mark Fleming, chief economist at First American.
He added that demand for homes from millennials is increasing, in contrast to the idea that they may prefer to rent.
“Title agents and real estate professionals estimated that the average age of the first-time homebuyers that they work with is between 26 and 30 (55%), or 31-35 (32%). In fact, combined, 26-to-35-year-olds accounted for 87% of first-time buyers, according to survey participants,” Fleming said.
In line with generations before them, millennials are challenged by saving a down payment but realize that buying a home is a better financial decision than long-term renting.
Affordability ranks second to saving for a down payment among millennials, according to the professionals polled. Inventory and access to credit are also challenges.
On home prices, Fleming said that First American’s survey suggests a rise over the next year.
“Residential property prices are expected to grow 4.2 % in the coming year, the strongest price forecast among all property types,” he said.
The states which those surveyed believe will have the strongest price gains over the coming year are: Kentucky (+8.6%), Washington (+8.0%), Michigan (+6.1%), Maryland (+6.0%) and New York (+5.8%).
More market update:
The perception that millennials are choosing to rent rather than buy a home is not the experience of title agents and real estate professionals polled by First American Financial Corp.