Consumers are becoming more positive toward the idea of homeownership as home prices rise and the threat of delinquencies and foreclosures subside, Trulia reported Wednesday.
Confidence in future ownership is especially prevalent among young renters. According to Trulia’s American Dream survey, 93 percent of renters between the ages of 18 and 34 plan to purchase a home some day.
For 31 percent of renters, that “some day” is actually within the next two years, an increase from 28 percent in May 2012 and 22 percent in January 2011. In addition, 27 percent of consumers feel more positive about homeownership compared to six months ago.
However, a downward trend was seen among consumers who say homeownership is part of their own personal American dream. Seventy-two percent said it is part of their own dream, a decrease from February 2009 and January 2010, when 76 percent and 77 percent, respectively, said homeownership was part of their dream.
Also, plans to own was not seen among older renters, with only 39 percent in the 55-plus age group stating they plan to buy, while 75 percent of those between ages 35 and 44 plan to buy.
Even though nearly all renters in the Millennials category (those between 18 and 34) say they plan to buy, the age group tended to be less optimistic about future home prices compared to older age groups.
When asked about the housing market in 2013, 37 percent of Millennials said prices will rise, compared to 55 percent for the 55-plus age group and 49 percent for those between ages 45 and 54, according to Trulia.
Millennials though were more likely to believe mortgage rates would continue to decline next year, with 20 percent stating rates will go down, compared to 12 percent among 35- to 44-year-olds and 13 percent for the 55-plus group.
“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.”
Rising prices are also encouraging homeowners to consider selling next year, which could lead to an increase in inventory, Trulia explained. Among homeowners, 22 percent say they’re at least somewhat likely to sell their home next year.
“2013 could be the year that inventory turns around, just as 2012 was the year that prices started recovering,” Kolko added. “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.”
Harris Interactive conducted the online survey on behalf of Trulia among 2,083 adults.