Chase: Confidence in Housing Market at Highest Level since 2014
By one measure, Americans are feeling confidence in the housing market at the highest level in years.
Chase, New York, said its housing confidence index in partnership with Pulsenomics showed record highs among U.S. homeowners and renters in three key measurement areas: their take on market conditions, aspirations for homeownership and expectations regarding home values and affordability.
Based on a 100-point scale, with levels above 50 as positive readings, Chase reported the national average at 66.3. Western region households led housing market optimism. Dallas (73.2), Denver (72.8) and Las Vegas (72.5), the cities with the highest housing confidence levels, have all seen more than 8-point index increases since the 2014 inception of HCI.
“These record results were driven by healthy assessments of local real estate market conditions among existing homeowners, but even more so by surging expectations among renters,” said Terry Loebs, founder of Pulsenomics. “Seven in ten renters now express confidence in their ability to afford a home someday, and nearly three-quarters of those with an opinion say that buying a home is the best long-term investment a person can make.”
The report said Dallas also topped the list for strongest homeownership aspirations. Eighty percent of Dallas renters are confident they will own a home someday, while 70 percent plan to purchase in the next five years. Dallas has also seen a growing job market over the past few years with large corporations moving to the area. More than 60 percent of Dallas homeowners said it is a good time to sell a home, with the majority citing the abundance of home shoppers as the most important reason.
When asked if it was a good time to buy and sell a home, Chase said both homeowners and renters across the country agree that now is a good time for people to purchase. By a ratio of nearly three-to-one, the number of households who believe ‘now is a good time to buy a home’ exceeds the number who said now is a bad time. That ratio was even higher in the South and the Midwest regions of the country, where more than one-half of respondents said it was a good time to buy. Only 17 percent said it was a bad time to buy, with most citing affordability as their main concern.
“Affordability remains a top focus for buyers in the market today, but we are encouraged by the overwhelmingly positive outlook across the country,” said Amy Bonitatibus, Chief Marketing Officer for Chase Home Lending.
The report said nearly 60 percent of renters across the country are looking to buy in the next five years, of which 70 percent are Millennials. The highest responses came from the South, where 62 percent are expecting to buy in the next five years and 33 percent looking to purchase in the next two years.
Earlier this month, Fannie Mae, Washington, D.C. reported its own Home Purchase Sentiment Index rose by 0.6 points in May to 92.3, reaching a record high for the second consecutive month. However, the survey noted consumer attitudes about buying and selling a home have continued to diverge as home prices have increased.
While the net share of respondents who reported that now is a good time to sell a home increased to 46 percent in May, and is now up 14 percentage points year over year, the net share who said now is a good time to buy a home decreased to 28 percent, showing little improvement year over year. Meanwhile, the net share of consumers who said home prices will go up in the next 12 months remained unchanged at 49 percent, while the net share who expect mortgage rates to go down over the next 12 months fell 1 percentage point.
“The perception of high home prices that underlies this optimism cuts both ways, boosting not only the good-time-to-sell sentiment but also the view that it’s a bad time to buy, and presenting a potential dilemma for repeat buyers,” said Doug Duncan, senior vice president and chief economist with Fannie Mae.
