With a seller’s market in many places across the country, why are so many homeowners reluctant to sell? Nearly 80 percent of more than 1,000 homeowners recently surveyed say they believe now is a good time to sell a home, but many don’t plan to list their homes anytime soon.
Numerous would-be sellers say they’re holding off because of the high price they’d have to pay for their next home, according to ValueInsured’s latest quarterly Modern Homebuyer Survey.
Out of the homeowners who say they are interested in selling their home to upgrade or downsize, the survey found:
72 percent say they are concerned with timing the real estate market.
63 percent say now is a good time for them to sell, but not to buy, due to high home prices.
61 percent are “waiting until prices to buy are better to make a move.”
“Homeowners in many cases are eager to sell but don’t want to become buyers,” says Joe Melendez, CEO of ValueInsured. “These homeowners have experienced a lot of home value volatility and see more uncertainties looming—tax reform, for example. By hesitating, these homeowners are actually controlling the market on both sides. Reassuring these individuals is the key to unlocking inventory.”
Melendez says the survey discounts the notion that low refinance interest rates were keeping homeowners from selling. Only 18 percent of homeowners looking to sell say they haven’t done so because they don’t want to give up their current low mortgage payment.
Twenty-six percent of potential home sellers admit that they second-guess their desire to sell because they don’t want to pay broker fees, new mortgage closing costs, capital gains taxes, or other associated expenses that could possibly weaken their buying power for their next home, according to the survey.
Fifty-seven percent of all homeowners surveyed who say they are interested in selling and moving say it’s likely that they will eventually move from their current home within the next three years. However, some say they plan to rent out their home or pass it on to family instead of selling it.
Daily Real Estate News | Thursday, November 16, 2017
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Homebuyers and sellers are confident in the housing market, but there are few sales to show for it, according to recently released findings from a survey by the National Association of REALTORS® (NAR).
NAR’s quarterly Housing Opportunities and Market Experience (HOME) report reveals homebuyers and sellers are stuck in neutral, despite a record 80 percent of homeowners surveyed for the report believing now is a good time to sell and 62 percent of renters believing now is a good time to buy. Low inventory is behind the stall, says NAR Chief Economist Lawrence Yun.
“The housing market has been in a funk since early spring because of the ongoing scarcity of new and existing homes for sale,” Yun says. “The pace of new-home construction has not meaningfully broken out this year, and not enough homeowners at this point have followed through with their belief that now is a good time to sell. As a result, home shoppers have seen limited options, stiff competition and weakening affordability conditions. Buyer demand is robust this fall, but the disappointing reality is that sales will continue to undershoot their full potential until supply levels significantly improve.”
Buying a home is already a pipe dream for many renters—and pushed even further out of reach by rising rents, the report shows. Fifty-one percent of renters expect their rent to increase in the next year, but 42 percent would renew their lease, rather than buy a home, if their rent did go up. (Only 15 percent would buy a home.)
“Even though the typical down payment of a first-time buyer has been 6 percent for three straight years, two-thirds of respondents indicated that saving for one is difficult right now,” says Yun. “Rents and home prices have outpaced incomes in the past few years, and this is undoubtedly impacting their ability to put aside savings for a home purchase, even if they increasingly believe it’s a good time to buy. Heading into next year, higher home prices and limited inventory in the affordable price range will likely continue to hold back a share of renters who would prefer to be homeowners.”
More of those surveyed (57 percent) believe the economy is improving, however—optimism that could potentially translate into more earnings, and, by extension, more housing opportunities. The survey’s Personal Financial Outlook Index, which gauges respondents’ sentiment on their financial situation over the next six months, leapt up to 62.0 in September.
“Jobs are plentiful, wage growth is finally showing signs of life, home values are up considerably in the past five years and the stock market is at record highs,” Yun says. “The economy is not perfect, and growth overall is still sluggish, but the financial health of the typical household looks as healthy as it has since the recession.”
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