NAR: Consumer homebuying sentiment dips in Q4

Dive Brief:

Fewer renters and homeowners think now is a good time to purchase a home than did a year ago, according to the National Association of Realtors’ fourth-quarter Housing Opportunities and Market Experience survey, which monitors consumer sentiment on housing.
The survey found that 57% of renters in the fourth quarter said now is a good time to buy, compared to 68% for the year-ago period. Meanwhile, 78% of homeowners today are optimistic about the current homebuying climate compared to 82% a year ago.
Three in 10 respondents in the fourth quarter said it’s not a good time to buy a home. Over the course of 2016, consumers in the Midwest and South have been the most optimistic about home purchases.

Dive Insight:

Owners are typically more optimistic than are renters about the homebuying environment. One reason for this is a tight market for entry-level housing inventory currently, which is pushing up prices in that category and keeping many would-be buyers stuck paying high rents.

In a report this week, real estate website Trulia found that the volume of for-sale starter homes fell the most in three years during the fourth quarter and is down 12.1% year over year. Meanwhile, that group spent nearly 2% more of their income to purchase a home during the quarter than they did a year ago. Overall, the nation’s housing inventory fell for the sixth-straight quarter and is down 9.1% from the fourth quarter of 2015, Trulia reported.

First-time buyers, which typically seek previously owned homes, accounted for 33% of existing-home sales in October and 34% in September, their largest share in more than four years, according to the National Association of Realtors.

Still, a pickup in new construction targeting entry-level buyers is necessary to soften prices and encourage new entrants to the market. Housing starts hit a nine-year high in October on the strength of a positive swing in multifamily construction while single-family posted a 10.7% increase for the month.

Friday's November starts report will offer more details on the continued recovery in the residential construction sector.