The confidence of new American homebuyers is rising but current homeowners are less confident in the market according to a new report
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The confidence of new American homebuyers is rising but current homeowners are less confident in the market according to a new report.
The Modern Homebuyer Survey from ValueInsured reveals that confidence among current homeowners slipped 2.6 points from 76.9% to 74.3% between quarter three and quarter four of 2017.
Meanwhile, millennial homebuyers’ confidence in the market was up 2 points to 59.1%.
"We're seeing the effects of a confident job market and the economy overall, particularly among millennials," said Joe Melendez, CEO of ValueInsured. "Borrowing standards are also loosening; lenders are more motivated to bring in first-time buyers. These, along with the increased anxiousness to buy, even sight unseen, are likely factors boosting new homebuyer excitement and confidence."
Only 35% of first-time homebuyers thought they would be able to save a down payment, down 9 points from a year earlier.
They are willing to make sacrifices though: 59% would cut down or stop eating out; 51% would take a second job; 47% would give up most or all vacations; 39% would cut give up most or all clothes shopping; and 33% would return to live, or remain living, with parents.
They are also concerned about buying a home at an unstainable price, while owners are worried their asset may lose its value.
Only 48% of all homebuyers and 42% of millennial first-time homebuyers feel positive that a home they buy today will retain or increase in value by the end of 2019.
"Homeowners' sentiments have always been a leading indicator of where the market could be headed, as they are more informed and closer to the ground," Melendez said. "They are also the key to increasing inventory. If more homeowners become motivated to sell, prices could ease. This, coupled with rising rates and other economic factors, should signal to new homebuyers to take further precautions when they buy."
