Americans Concerned Hot Housing Market Could Be Heading for Correction
Michael Tucker firstname.lastname@example.org
Americans have simmering concerns about overheated house prices and increasingly suspect that a housing price correction may be imminent, reported ValueInsured, Dallas.
"We see more homebuyers concerned with timing the market," said ValueInsured CEO Joe Melendez. "This is especially true for Millennials, who are more likely to switch jobs, relocate or need to upsize in the next few years. No one wants to buy at the peak and find themselves underwater as so many did a decade ago."
ValueInsured's Modern Homebuyer Survey noted several positive housing market indicators: prices are rising and inventory is low, keeping housing confidence on a positive trajectory. And nearly eight in 10 Americans surveyed called homeownership an important part of their American Dream. Thus, the firm's Housing Confidence Index score remained stable at 68.7 on a hundred-point scale, up a single percentage point during the second quarter.
Although Americans are committed to homeownership, their confidence in buying now--and their expectation that homes will hold their current value--has measurably declined, ValueInsured said. Nearly 60 percent of American homeowners surveyed believe homes in their area are overvalued and current prices are unsustainable, a 7 percentage point increase since last quarter. These fears are especially evident among urbanites, with 65 percent of homeowners and homebuyers saying housing is overvalued and home prices are unsustainable.
Prospective homebuyers as a whole are also more wary, ValueInsured said. Nearly two-thirds of all homebuyers and 72 percent of Millennial homebuyers expressed concern regarding timing the market and said they want to ensure they are not "buying high." These figures represent double-digit jumps from just three months ago.
A majority of homeowners think the peak is at least getting close, the report said. Nearly 60 percent of homeowners said they expect a "housing bubble and a price correction" in the next two years--up 12 percentage points since April.
More than eight in 10 homeowners surveyed think now is a good time to sell, a 9-point jump from last quarter. Only 43 percent of first-time homebuyers expressed confidence that a home they buy today will gain value by the end of 2018.
"Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market," Melendez said. "To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy."