MReport March 2019

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48 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Shifting Housing Sentiment Analyzing the sentiment of buyers, sellers, and renters. T he dynamics of the housing market, which had grown over the past few years fu- eled by high demand, limited inventory, and low mortgage rates, shifted gears by the end of 2018, according to a study by Trulia that looked at how last year shaped the 2019 outlook of homebuyers, sellers, and renters. The study, which surveyed more than 2,000 adults across the U.S. revealed that while Americans still dream of owning a home, the dream was getting more distant for younger adults who made up the biggest chunk of first-time buyers. Home sellers were also less optimistic as home price appreciation slows. Despite the spate of natural disasters in 2017 and last year, the study found that the fear of wildfires, hurricanes, torna- dos, and floods aren't deterring homebuyers. Fifty-two percent of those surveyed said that they are no more or less concerned than in past years about the potential threat of natural disasters affecting their home. What they are less optimistic about, however, is the overall housing market, the study found. Even though they intend to buy a home regardless of the current housing market trends, 19 percent of those surveyed said they would do so in 2019, up from 16 percent a year ago. However, a majority (60 percent) said they planned to wait until after 2020 to buy a home. Among home sellers, 29 percent said they believed 2019 would be a better year to sell than 2018, compared to 21 percent who said this year would be worse than 2018. However, last year American home sellers were much more bullish on selling, the study re- vealed, with 31 percent saying this year would be better than last. As to what would be a key fac- tor to hold back homebuyers this year, the study listed money as a key challenge for would-be home- owners. Nearly all (92 percent) of the U.S. renters surveyed said that while they wished to buy, they perceived barriers in homeowner- ship related to personal finances. Delaying the American Dream NAR examines what's keeping interested homebuyers on the sidelines. T he share of homeowners who view homeown- ership as part of the American Dream is quite high at about 90 percent, accord- ing to a National Association of Realtors (NAR) analysis. However, among nonhomeown- ers, 75 percent view homeown- ership as part of the American Dream. So what is preventing these Americans from making their dream a reality? According to NAR, it's affordability. "The lack of affordable and moderately priced homes has forced nonhomeowners to delay achieving that part of the American Dream," said Lawrence Yun, Chief Economist at NAR with the release of the Aspiring Home Buyers Profile. "However," he added, "as the survey confirms, significant lifestyle changes like marriage or starting a family often spur nonowners to pursue homeownership." In the fourth quarter of 2018, 43 percent of nonowners cited affordability as their primary reason for not owning a home, down from 49 percent in the third quarter but still ranking as the No. 1 reason for not owning a home. Thirty-three percent of nonown- ers cited "current life circumstanc- es" as their reason for foregoing ownership for the time being, and 16 percent said they would wait to purchase a home because they need "the flexibility of renting" right now, according to NAR. The share of nonhomeowners who feel now is a good time to buy a home waned over the year, starting at 51 percent in the first quarter and ending the year at 47 percent in the fourth quarter. Nonowners who said now is a good time to purchase a home spanned all age, income, and city size brackets, except in the West where nonowners were slightly more pessimistic, NAR pointed out. Meanwhile, the share of homeown- ers who feel now is a good time to purchase a home hovered between 69 and 73 percent in 2018, ending the year at 72 percent. "While home sales were slightly down in 2018, there is still a sizable pent-up housing demand," Yun pointed out. "Economic growth, interest rates, and the supply of moderately-priced homes will dictate how well the real estate industry will do this year." NAR also questioned survey respondents about opening their homes to their adult children or other adults and how that has impacted their outlook on their homes. Eleven percent of home- owners had an adult move into their home in the past year, while five percent of nonowners reported the same. Of those, 44 percent said that adult plans to stay for more than a year or permanently. Twelve percent of those who had an adult move into their home have considered moving or did move because they feel their hous- ing is now "inadequate," according to NAR's survey. 43% \ of nonowners cited affordability as their primary reason for not owning a home. Source: National Association of Realtors Percentage of the U.S. renters surveyed who said that while they wished to buy, they perceived barriers in homeownership related to personal finances. 92% \

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