The National Association of Realtors®
(NAR) said consumer confidence is growing across the country, especially in rural
and middle America. Its most recent
quarterly Housing Opportunities and Market Experience (HOME) survey found the
share of households who believed the economy is improving rose to the highest
level during the first quarter of 2017 than at any time in the five-year
history of the survey. Sixty-two percent
of respondents expressed positive sentiments about the economy, up from 54
percent at the end of 2016 and 48 percent last March.
NAR Chief Economist Lawrence Yun said the
geographic dispersal of answers to the question represents an extraordinary
reversal from previous surveys. Positive
answers rose from 51 percent in the Midwest last quarter to 67 percent and in
rural areas by 20 percentage points to 63 percent. A year earlier only 49 percent of Midwesterners and 35 percent of those living
in rural areas thought the economy was improving.
levels generally rise after a presidential election as the nation hopes for the
best.," Yun said. "Even though it is a
highly polarized country, consumers for the most part have upbeat feelings
about the economy right now. Stronger
business and consumer morale typically lead to even more hiring and spending,
which in turn encourages more households to make big decisions like buying a
home. These positive developments would be especially good news for prospective
homebuyers in the more affordable Midwest region."
HOME survey also asks respondents various questions about their housing
expectations. Among renters, the share
who view this as a good time to buy a house continues to decline, dropping 1
percentage point from last quarter and 6 points from a year earlier to 56
percent. A much higher percentage of
homeowners think it is a good time to buy, 80 percent, compared to 78 percent
in the last survey and 82 percent a year ago.
Younger households, those living in the costlier West region - where
prices continue to spike - are the least optimistic.
said worsening inventory conditions and rising home prices and mortgage rates
are all causing renters to be more negative toward homebuying. "These factors are giving many renter
households a pause about it being a good time to buy, even as their job
prospects improve and wages grow. Unless there's a significant boost in supply
levels this spring, these constraints will unfortunately slow or delay some
prospective buyers' pursuit of purchasing a home."
promising trend that could alleviate supply shortages is the notable bump in
the share of respondents who believe now is a good time to sell a home; 69
percent this quarter compared to 62 percent in the previous quarter and 56
percent in the first quarter of 2016.
the trend over the past year, those in the West continue to be the most likely
to think now is a good time to sell (77 percent), while also being the least
likely to think it's a good time to buy (61 percent).
survey responses pointed to improved feelings about one's own household
finances. The HOME survey's monthly Personal Financial Outlook Index showing
respondents' confidence that their financial situation will be better in six
months, jumped to its highest reading in the survey, climbing to 62.6 in March
from 59.8 in December 2016. A year ago, the index was 58.1.
President William E. Brown says homeowners looking to trade up or move down
this spring could find themselves in a tricky spot without careful planning and
a reliable expert on their side. "Demand far outpaces supply in many parts of
the country right now, which means homeowners will likely sell their home much
quicker than the time it takes to buy another," he said. He advises sellers to work
with their Realtors to develop a carefully crafted plan before listing their
HOME survey was conducted via random digit dialing of both land lines and cell
phones in January through early March. Each
month approximately 900 qualified households responded to the survey. A total
of 2,698 household responses are represented in the reported data.