Survey underscores need for more single-family homes
Seventy-five percent of people who took part in a recent survey believe now is a good time to purchase a home, and about the same ratio of households would buy a single-family home if they were to buy in the next six months.
Those were among findings in a new quarterly survey from the National Association of REALTORS®. Its Housing Opportunities and Market Experience (HOME) survey also revealed that confidence about now being a good time to buy is waning among renters, particularly in the West where prices continue to rise.
Asked about location preferences, nearly eight in 10 renters (79 percent) would choose to buy outside an urban area. Consumers have an overwhelming preference for single-family homes in suburban areas, with 85 percent of current owners and 75 percent of renters saying they prefer that style.
Lawrence Yun, NAR chief economist, said the survey findings underscore a glaring need for more single-family homes.
"The American Dream for most consumers is not a cramped, 500-square-foot condo in the middle of the city, but instead a larger home within close proximity to the jobs and entertainment an urban area provides," Yun suggested, adding, "While this is not a new discovery, supply and demand imbalances and unhealthy levels of price growth in several metro areas have made buying an affordable home an onerous task for far too many first-time buyers and middle-class families."
In discussing the latest survey results, Yun urged homebuilders to double their focus on building single-family homes. With increasing numbers of millennials moving to the suburbs, as NAR recently reported, he said tight inventory and affordability concerns will likely worsen without significant increases in housing starts relative to job creation.
The survey also uncovered changing attitudes about ideal times to sell. Fewer current homeowners (56 percent) believe now is a good time to sell. That represents a drop from fourth quarter 2015 when 61 percent thought that was a good time to sell. Amidst steep prices increases and tight supply respondents in the West were the most likely to think now is a good time to sell, while also being the least likely to think now is a good time to buy.
Heading into the spring buying season, NAR's survey found that about the same share of homeowners (82 percent) believe now is a good time to buy, but optimism among renters dropped from 68 percent last quarter to 62 percent.
NAR's first quarter HOME survey also queried respondents about other expectations and preferences. Findings included:
- Four in five people who currently own a home, those over 65 years of age, those with incomes over $50,000, and those in the Midwest believe now is a good time to buy a home;
- More than one-third of buyers of all ages would prefer to live in a close-in suburb. For those between ages 55 and 64, rural settings are also attractive.
- Younger respondents and those who are renters and live with someone else are more likely than others to consider buying in an urban area.
When asked about location preferences if they were to buy in the next six months, most respondents said they would stay in an area similar to their current living situation. More than two-thirds of those currently living in rural areas and 75 percent of those living in suburban areas would buy in a similar area. Only those living in an urban area would be more likely to move elsewhere. Most respondents in this group said they'd choose a suburban area within 20 miles of the city as their preferred destination.
NAR's survey is conducted by TechnoMetrica Market Intelligence, a full-service, independent firm. New questions are added each quarter to reflect timely topics affecting the real estate marketplace. The next release is scheduled for mid-June.