Market Outlook- Homeowners' Perspective
Market Outlook – Homeowners’ Perspective
Despite the negative impact on homeowners’ equity, the decline in home prices, combined with historically low mortgage rates, have dramatically improved affordability, creating opportunities for home buyers. In fact, housing affordability was cited by buyers in one fashion or another as a market condition that motivated them to purchase a house:
Sixty-eight percent of home buyers said price decreases motivated them to buy.Thirty-nine percent said low interest rates helped them move to a better locationl
Twenty-three percent claimed the likelihood that rates will move up as the motivating factor.
Nineteen percent stated that improved housing affordability due to low interest rates led to their decision in buying a house.
Home buyers, in general, were optimistic about the future direction of home prices in their neighborhood.
Over half of the buyers did not know whether prices would go up or down over the next year, while one-third of them believed home prices in their area would stay flat, and fewer than one of ten believed prices would go up.Buyers were more optimistic about the five-year outlook. One-third believed home prices in their area would go up, and one in five believed prices would stay flat. Still, close to half had no idea of the direction of prices in the future.
Buyers were more confident about the long-term prospects of home prices in their neighborhood. Sixty percent
thought prices would go up in ten years, three percent thought prices would stay flat, and 37 percent were unsure
about the direction of home prices.
Home buyers’ long-term optimism with the housing market was an important reason for them to become homeowners, but many who decided to buy were not expecting to move soon and thus were not concerned about price depreciation in the short term. The typical home buyer planned to stay at the current residence for four years before selling the property. While 35 percent of all home buyers were not sure how long they planned to stay at their current home, none of the remaining home buyers planned to sell in less than two years. Twenty-six percent of the remaining home buyers planned to live in their current home for two to three years, 44 percent planned to stay for three to four years, and 30 percent planned to stay for four to five years.
Consistent with the implication suggests by the survey results, a study from the U.S. Census Bureau indicates that the national mobility rate declined to 11.9 percent in 2008, the lowest rate since the bureau began tracking the statistics in 1948. Experts said the lack of mobility was attributed in part to constraints posed by the housing and the economic slump.
Do you think prices in your neighborhood will go up, down, or stay flat in 1 year? 5 years? 10 years?
Fair Housing and Equal Opportunity
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