Consumer confidence across the country, and especially in rural and middle America, is rising, according to new consumer survey findings from the National Association of Realtors. The survey additionally found a growing disparity among renters who think it’s a good time to buy and homeowners who think it’s a good time to sell.
According to the Realtor's ongoing quarterly Housing Opportunities and Market Experience (HOME) surveytbvxwqvqdqrqdrafwyrvtdqcrzqtbbcdf, 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%), up from 54% last quarter and 48% in March 2016.
NAR Chief Economist Lawrence Yun said the surge in positive sentiment about the economy is primarily from respondents living in the Midwest (67%; 51% last quarter) and rural areas (63%; 43% last quarter). Last March, only 49% of Midwesterners and 35% 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,” he said. “Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big decisions like buying a home. These positive developments would be especially good news for prospective homebuyers in the more affordable Midwest region.”
Higher confidence in the economy is also translating to better feelings about households’ financial situation. The HOME survey’s monthly Personal Financial Outlook Index showing respondents’ confidence that their financial situation will be better in six months, jumped to its highest reading in the survey, climbing to 62.6 in March from 59.8 in December 2016. A year ago, the index was 58.1.
On the cusp of the busy spring season, most households believe now is a good time to buy a home. However, confidence continues to trickle backwards among renters. 56% of renters said now is a good time to buy, which is down both from last quarter (57%) and a year ago (62%). Eighty% of homeowners (78% in December 2016; 82% in March 2016) think now is a good time to make a home purchase. Younger households, renters and those living in the costlier West region – where prices continue to spike – are the least optimistic.
“Inventory conditions are even worse than a year ago and home prices and mortgage rates are on an uphill climb,” added Yun. “These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow. Unless there’s a significant boost in supply levels this spring, these constraints will unfortunately slow or delay some prospective buyers’ pursuit of purchasing a home.”
One trend that could alleviate supply shortages is the notable bump in the share of respondents this quarter who believe now is a good time to sell a home. 69% of homeowners think now is a good time to sell, which is up from last quarter (62%) and a year ago (56%). Continuing the trend over the past year, those in the West continue to be the most likely to think now is a good time to sell (77%), while also being the least likely to think it’s a good time to buy (61%).
The survey was conducted by TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,698 household responses are represented.