There's something special about first-time homeowners. The sparkle in their eyes. The “I-can't-believe-we-finally-did-it” way they carry themselves. The giddiness and hint of terror in their voices as they tell the story of how they found "the one" and realize each time they tell it what a commitment they've made. It's fantastically American.
It's how I know sentiment towards homeownership is still alive no matter what any rent-vs-buy index says – no matter what any consumer confidence or homeownership attitudes survey reports.
Right now, however, more and more Americans do feel that it's a great time to buy a home. In a survey of 1,001 Americans last month, Fannie Mae found that 73% believe it's a good time to buy, up from 72% of the respondents in May.
Another interesting finding in the survey is that the number of Americans who said it is a good time to sell remained at 15% in May. That's a pretty low number and reflects what buyers in some markets are seeing: tight inventory due to a lower number of homeowners putting their houses up for sale.
These sentiments, along with record low interest rates, have created a perfect storm for some buyers – though not all. In fact, many of the buyers in pockets around Intero's headquarters in the Bay Area are feeling the pressure of low inventory. Their bids are met with heavy competition and some are bidding so far over asking price you'd think it was 2004 all over again.
All of this would suggest that that perfect time to buy could very quickly be slipping away. Fannie Mae's survey found that 69% of respondents said they would buy a home in June, up from 63% in May. This is the highest level since the survey began. Consumer confidence on the buy side is alive and strong.
In addition, consumers in the survey predict that home prices will rise 2% over the next 12 months, up from 1.4% in May.
My prediction is that at some time during those 12 months, we'll see the confidence start to tip over to sellers too and they will be less hesitant to list their homes for sale. This will free up inventory in those tight markets and fuel a steady flow of sales.
Not all markets will recover on the same time frame, of course. But I think it's safe to say that if your market has low inventory right now, the worst is likely behind you.