According to the survey, 58% of homeowners now think the market is getting close to its peak, an increase of 12 percentage points from April.
While a majority of Americans are still committed to homeownership, there has been a decline in confidence in buying now as well as expectations that current home values will hold. The ValueInsured Housing Confidence Index was 68.7 on a 100-point scale, an increase of only one percentage point from April. Housing confidence remains on a positive trajectory given rising prices and low inventory, ValueInsured said.
However, more homeowners now think that homes in their area are overvalued and that current prices are unsustainable. The percentage of homeowners with this sentiment was 57% during the quarter, an increase of seven percentage points from the previous quarter. That figure is much higher for homeowners and homebuyers in urban areas at 65%.
Housing market concerns have also increased among prospective homebuyers. Those who are concerned with timing the market and want to ensure they are not buying high make up 63% of all homebuyers and 72% of millennial homebuyers. Both figures are double-digit increases from the previous quarter.
“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.”
The survey further found that 83% of homeowners think now is a good time to sell, an increase of 9 points from the prior quarter. Of first-time homebuyers, only 43% think that a home purchase today would result in gains by the end of 2018.
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Housing sentiment falls in July
The number of homeowners expecting a housing bubble and a price correction in the next two years increased during the second quarter, according to ValueInsured’s latest Modern Homebuyer Survey.