Consumer Sentiment on the Rise as U.S. Real Estate Heads into Spring Home-Buying Season
Despite concerns of federal interest rate hikes, current and
prospective homeowners show a more favorable view of the real estate
market in Berkshire Hathaway HomeServices’ latest Homeowner Sentiment
Survey
IRVINE, Calif.–(BUSINESS WIRE)–Berkshire Hathaway HomeServices, part of the HSF Affiliates LLC family
of real estate brokerage franchise networks, today released results of
its latest Homeowner Sentiment Survey indicating that current and
prospective homeowners are increasingly optimistic about U.S. real
estate. Respondents cited low interest rates, an improving economy and
increasing housing inventory as key reasons for their growing optimism.
Reversing downward trends for the past two surveys, 61% of current
homeowners and 65% of prospective homeowners now see the real estate
market as more favorable for sellers and buyers. In fact, 76% of
prospective homeowners – a survey group composed mainly of millennials
and Gen-Xers – said this year is a more ideal time to buy a home. That
represents an 11-point jump from the December survey.
“Our data underscores what we’re beginning to see across America – that
millennials are increasingly interested in homeownership and its
virtues,” said Gino Blefari, CEO of HSF Affiliates. “They understand
that mortgage rates are still low, the economy and jobs pictures look
good and that housing remains a fundamental, long-term investment.
Opportunity is opportunity, no matter your demographic.”
Respondents seem to have shaken off the effects of the Federal Reserve’s
December rate hike. In the December
Homeowner Sentiment Survey, 68% of prospective homeowners polled
said that increased rates would have “some impact or a strong impact on
my life.” Yet mortgage rates trended lower and remain near historic
lows. Though the Federal Reserve has pledged additional increases in its
benchmark interest rate, respondents cited lower rates as the primary
reason for their optimism toward real estate. In fact, an increasing
number of current homeowners – whose ranks are mostly Boomers and
Gen-Xers – see modest mortgage rate hikes as a sign that the real estate
market is heading in the right direction.
“Though no one can predict the future, we believe there’s a high
probability that mortgage rates will remain low for the foreseeable
future,” said Berkshire Hathaway HomeServices President Stephen
Phillips. “The Federal Reserve will act responsibly with future rate
increases yet, to a degree, its hands are tied by the shaky state of the
global economy. Aggressive tightening would not only choke progress in
the U.S. economy, but would also impact foreign economies that continue
to seek stability.”
Prospective homeowners are significantly less concerned than in December
(by 17 percentage points) that low housing inventory, which has hampered
real estate’s recovery in many markets, will hurt their chances to find
the right home. They are less concerned (by 10 percentage points from
the previous survey) that new lending requirements will make it more
difficult to qualify for home loans.
However, 72% of prospects showed increasing concern that rising home
prices will make it more difficult to buy a home. That’s a 6-point jump
from the December survey. To purchase their ideal home, current
homeowners and prospects said they are more willing to forego swimming
pools, accessibility to public transportation, basements and proximity
to their workplace. They are less likely to compromise on location
within a good community, a good floor plan, proximity to solid schools
and the outward appearance of a home.
“We expect a busy spring home-buying season with momentum extending
through the year,” said Blefari. “As millennials increasingly embrace
homeownership, it will add to a domino effect among move-up buyers that
should ease tight inventory in many markets and bring more balance to
real estate overall.”
The full survey details are available upon request.
Berkshire Hathaway HomeServices Consumer Sentiment Survey Methodology
Interviews with 2,506 respondents were conducted online by Edelman
Intelligence in February 2016. The respondents captured were either
current homeowners (individuals who currently own a home as a primary
residence) or prospective homeowners (individuals who do not currently
own a home and are likely to buy a home as their primary residence in
the next six months). The margin of error is +/-2.2% for current
homeowners and +/- 4.4% for prospective homeowners.
About Berkshire Hathaway HomeServices and HSF Affiliates LLC
Berkshire Hathaway HomeServices, based in Irvine, CA, is a real estate
brokerage network built for a new era in residential real estate. The
network, among the few organizations entrusted to use the world-renowned
Berkshire Hathaway name, brings to the real estate market a definitive
mark of trust, integrity, stability and longevity. Visit www.berkshirehathawayhs.com.
Irvine, CA-based HSF Affiliates LLC operates Berkshire Hathaway
HomeServices, Prudential Real Estate and Real Living Real Estate
franchise networks. The company is a joint venture of which HomeServices
of America, Inc., the nation’s second-largest, full-service residential
brokerage firm, is a majority owner. HomeServices of America is an
affiliate of world-renowned Berkshire Hathaway Inc.
Prudential, the Prudential logo and the Rock symbol are service marks of
Prudential Financial, Inc. and its related entities, and are used under
license with no other affiliation with Prudential.
Contacts
for Berkshire Hathaway HomeServices
Kevin Ostler, 949-794-7980
kevinostler@hsfranchise.com
or
Marisa
Pincas, 212-704-8112
marisa.pincas@edelman.com
