As the spring housing market gets underway there could be a problem with how buyers and sellers are feeling.
With low inventory driving up prices, increased willingness of homeowners to list their properties is welcome, but a new report suggests demand may be hampered.
The National Association of Realtors’ HOME (Housing Opportunity and Market Experience) Survey shows that homeowners are increasingly optimistic about selling (74% in Q1, 2018 vs. 71% in Q4, 2017); but non-homeowners are concerned about saving for a down payment and rising mortgage rates.
The share of potential buyers that feel that now is a good time to buy is at its lowest for 2 years (68% compared to 72% last quarter) and this is even lower among renters (55%, down from 60%).
“The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers – and especially first-time buyers – to overcome," said NAR chief economist Lawrence Yun. "Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months.”
He added that Realtors are reporting dismay among buyers of the competitiveness of the market for the homes they can afford
Financial situation better, debts worse
The first three months of 2018 has shown improved sentiment about the economy and consumers’ financial situation. This was strongest among those in the South and rural areas.
However, limited income (47%), student loan debt (30%), and rising rents (28%) were the top three obstacles cited by non-homeowners as barriers to buying.
When asked for potential reasons why they may find qualifying for a mortgage difficult, 45% said income uncertainty, 34% low credit score, and 26% said too much existing debt.
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