Positive signs in the housing market are boosting consumer positivity and confidence when it comes to homebuying in 2013.
That’s one of the big findings from a survey released recently by real estate listing site Trulia. Nearly a third of renters plan to buy in next two years, a 9-point increase from January 2011, the survey found. More than a quarter (27 percent) feel more positive about homeownership than they did six months prior.
Despite that boost in confidence, the overall percentage of consumers who view homeownership as a vital part of their “personal American Dream” continues to lag below early 2009 levels, according to the survey.
What’s it all mean?
It’s hard to say for sure, but at the very least it seems prospective homebuyers are increasingly optimistic for what 2013 holds.
Homes Still on Horizon
“2013 could be the year that inventory turns around, just as 2012 was the year that prices started recovering,” Jed Kolko, Trulia’s chief economist, said in a news release. “Homebuyers need inventory to choose from, and with fewer foreclosures on the market, new inventory will come from new construction or homeowners wanting to sell. Rising prices will bring out more sellers, especially if price increases lift them back above water.”
Despite the horrific housing market headlines over the last four years, young people remain interested in owning a home at some point in their lives, too. Nine in 10 of the 18- to 34-year-old renters surveyed said they plan to purchase a home. But there’s also an indication that this younger demographic is misreading the longer-term trajectory of the housing market.
The survey found that 18- to 34-year-olds are less likely to expect higher mortgage rates and home prices in 2013.
“Millennials have been shaken, not scarred by the housing bust,” Kolko said, “Nearly all of them want to own a home someday, if they’re not homeowners already. But many of them think today’s low prices and low mortgage rates will last. They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”
Credit Still Crucial
The Trulia survey was conducted over four days in mid-November and included more than 2,000 people. It comes on the heels of another recent survey that expressed a growing optimism regarding the housing and mortgage markets.
Fannie Mae’s latest housing survey found that slightly more than half of respondents thought it’s now easier to get a mortgage. Consumer confidence is important, but it’s equally important for military borrowers to know that credit and credit scores will continue to play a critical role in the home loan process. Right now, lenders are generally looking for scores of at least 620.
If you know that’s going to be a major hurdle, contact our Lighthouse Program at 888-392-7421. The credit experts at Lighthouse work with military members and families for free to develop a plan to boost their scores and get on the path to loan prequalification.
Photo courtesy of Neubie