Years of uninterrupted job gains and hope that 2017 will see continued economic growth are igniting consumer confidence across the country, according to new consumer survey conducted by the National Association of Realtors (NAR). The survey also found a growing disparity among renters who think it is a good time to buy and homeowners who think it is a good time to sell.
The national Realtor group's quarterly Housing Opportunities and Market Experience (HOME) survey, asked respondents questions about their confidence in the U.S. economy and their housing expectations. In the first three months of 2017, the share of households believing the economy is improving soared to its highest share in the survey's five-quarter history (62 percent), and is up from 54 percent last quarter and 48 percent in March 2016.
NAR chief economist Lawrence Yun indicated the surge in positive sentiment about the economy is primarily from respondents in the Midwest (67 percent) and rural areas (63 percent). Last March, only 49 percent of Midwesterners and 35 percent of those living in rural areas thought the economy was improving.
"Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now," said Yun.
While most households believe now is a good time to buy a home, affordability and inventory challenges appear to be dimming renter optimism. Younger households, renters and those living in the costlier West region, where prices continue to rise, are the least optimistic, especially now with interest rates increasing. Fifty-six percent of renters responding to the survey said now is a good time to buy, down both from last quarter (57 percent) and a year ago (62 percent).
"It's considerably tougher for renters or first-time home buyers to purchase a home in California because of the tight inventory conditions. A growing workforce is good for the economy, however that leaves us with a severe housing shortage," said Denise Welsh, president of the Silicon Valley Association of Realtors. "Even if wages are improving, the competition for homes is tough and qualified buyers are unable to find anything."
One 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. Sixty-nine percent of homeowners think now is a good time to sell, up from last quarter (62 percent) and a year ago (56 percent). Like last year, those in the West continue to be the most likely to think now is a good time to sell (77 percent).
Welsh said the month of February showed an uptick in inventory of single-family homes for sale in the region. "According to MLSListings, our association's multiple listing service provider, compared to January 2017, inventory rose 20 percent in Santa Clara County and 13 percent in San Mateo County. We are hoping for a busy spring season," said Welsh.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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