Amid rising home prices, increasing home sales, and falling delinquencies and foreclosures, more than 1 in 4 consumers (27%) feel more positive about home ownership than they were six months ago, compared with 19% who report feeling more negative. In fact, 31% of today’s renters plan to buy a home in the next two years—a 9‑point increase from 22% in January 2011. However, some Americans remain skeptical about owning a home. Only 72% of consumers said home ownership is part of their personal American Dream, which remains below February 2009 and January 2010, when 76% and 77%, respectively, agreed with this sentiment.
MILLENNIALS AND HOME OWNERSHIP
Despite coming of age through the years of boom and bust, Millennials (18–34 year olds) haven’t completely written off home ownership. In fact, 72% of these young adults say home ownership is part of their personal American Dream, which is the same as the adult population overall. Among renters in this age group, 93% plan to purchase a home some day. Meanwhile 43% of young adults are homeowners already. Yet despite these long-term aspirations, Millennials have vastly different expectations for the housing market in 2013 than older generations.
2013 — MORE HOMEOWNERS LIKELY TO SELL
In 2012, housing inventory was down 23% nationally year-over-year, and down 43% since 2010. This decrease in homes for sale has limited the options for would-be buyers. However, rising prices could trigger more sales, thereby increasing inventory, in 2013. Among current homeowners, 22% said they are at least somewhat likely to sell their home in the next year. This was especially true among homeowners who bought their home between 2010 and 2012, as they’re more likely to have seen their home values increase since purchase—which means they’re more likely to be able to sell at a profit.
“Millennials have been shaken, not scarred by the housing bust,” said Jed Kolko, Trulia’s Chief Economist. “Nearly all of them want to own a home someday, if they’re not homeowners already. But many of them think today’s low prices and low mortgage rates will last. They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”
“2013 could be the year that inventory turns around, just as 2012 was the year that prices started recovering,” said Jed Kolko, Trulia’s Chief Economist. “Homebuyers need inventory to choose from, and with fewer foreclosures on the market, new inventory will come from new construction or homeowners wanting to sell. Rising prices will bring out more sellers, especially if price increases lift them back above water. ”[Source: "American Dream survey." Trulia/Harris Interactive. 12 Dec. 2012. Web. 12 Dec. 2012.]