The National Association of Realtors NAR has recently revealed after an intensive survey that despite a favorable view on the economy and the direction of the United States home prices, home buying continues to take a nosedive as 2018 comes to a close.
The association went on to explain that the rate at which people are willing to buy homes reduced from its initial 39 percent in the third quarter to 34 percent in the fourth quarter of 2018. A year ago, the consumer sentiment on the willingness to buy homes in the same period went as high as 43 percent. However, stakeholders who voted that this is not a good time to buy remained at 37 percent which stood at 28 percent in the fourth quarter of 2017.
In addition, the fourth quarter Housing Opportunities and experience survey conducted by NAR revealed that 71 percent of those in the urban areas believe that the economy of the Trump-led administration is improving while this is said to be true by 53 percent of those in the urban areas.
The National Association of Realtors also believes that the steady and rapid increase in the prices of real estate which is in excess of income growth has been the cause of the reduced interest in home buying.
The median home prices in a six-year period (2012-2018) have risen to a whopping 44 percent increase while the average hourly earnings increased just 16 percent in the same period. There was a recent survey to find out the status of home prices in the last 12 months and the results were interesting.
In the reports, 33 percent of the respondents felt that housing prices have remained the same while 63 percent expressed that housing prices in their localities have increased in the last 12 months.
In October, the national median of home prices stood at $255,400 while that of the West alone was $382900. The western residents who are 45-54 years of age and earns over a $100k annual income responded that housing prices did increase in their localities. Also, 56 percent of renters, 67 percent of homeowners and 50 percent of people living with other people also believed housing prices had increased while 40 percent of those who earn less than $50k expressed that the prices of homes have remained the same.
Stakeholders such as Alexander Romanov Co-founder of I Will Buy House alongside respondents were also asked for their predictions on home prices in the next couple of months. Over 40 percent predict home prices in their localities will remain unchanged.
Majority of the Americans who believe the country’s economy is improving are the residents of the west. NAR believes that this is due to the fact that the west has huge job-creating opportunities. However, home buying sentiment is not strong in the west because of the high cost of real estate in the region.
Romanov concluded by stating that the reason for the decrease in home buying in the last quarter is because potential buyers are optimistic that the prices might be friendly again as we progress into the new year