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  • Improved confidence could offer a boost to the housing market


    A new outlook from consumers revealed the housing market could continue its ascent in coming months, according to Stephen Phillips, COO of HSF Affiliates, a residential brokerage firm.

    In a survey of 2,559 Americans who were either looking to buy or a sell a home, 78 percent of respondents gave a favorable view of the real estate market. The Consumer Outlook Survey was conducted by HSF Affiliates and Prudential Real Estate featuring respondents aged 25-64 with a household income of at least $50,000.

    "This could indicate the start of an important trend," Phillips said. "Younger Americans seem to be gaining confidence in housing as the economy improves. Pent-up housing demand caused by the Great Recession may be starting to loosen."

    The 2014 survey was consistent with the previous three studies and was up 26 points since the first survey was administered in 2011. More than four-fifths of respondents - 82 percent - said the housing market is moving in the right direction, which is a 3 percent jump from the first quarter of the year.

    Consumer optimism is trending up
    Confidence in the economy is helping propel the nation's housing market. In October, the Conference Board's Consumer Confidence Index climbed to its highest mark since October 2007. With an index rating of 94.5, it was more than 5 points higher than September's reading and stronger than initially expected.

    Bloomberg said an improved job market and lower gas prices have fueled the rising levels of optimism. Gas prices are nearing a four-year low and the labor market is reaping the benefits of lower long-term unemployment.

    "It appears as though we'll have an extended period of lower energy prices, which should be helpful," said Michael Moran, chief economist at Daiwa Capital Markets America Inc. "It should boost confidence, give individuals a bit more discretionary income, so it's a clear plus for the economy."

    The Consumer Outlook Survey from HSF Affiliates cited low mortgage rates and climbing home prices as two more favorable factors helping lift the prospects of the economy, which could bring more people into the housing market by the end of the year.

    "Consumers may be shopping for more," Earl Lee, CEO of HSF Affiliates, said in a statement. "Our data shows people understand the opportunities in housing now and, because they feel better about their personal situations, many say they are ready to capitalize."

    Seventy-two percent of respondents expected more competition for homes, while 70 percent of prospective buyers and sellers said it's a good time to close on a transaction.

    Young adults are excited about the housing market
    Contrary to popular opinion, millennials are actually quite interested in the housing market. Millennials, a group of approximately 80 million young adults in the U.S., had the  most favorable view of the real estate market at 85 percent. It was the most optimistic outlook for any demographic heading into the stretch run of 2014.

    Millennials make up a large portion of first-time homebuyers on the market. First-time buyers could start making a serious splash as home inventory increases and median values appreciate at a slower pace. More than half of all respondents said they were first-time homebuyers or sellers.

    "Homeownership is alive and well, available at attractive pricing in many markets," Gino Blefari, incoming CEO of HSF Affiliates, said in a statement.

    Fifty-eight percent of respondents said low rates on mortgage loans was the prime reason they were interested in entering the housing market.

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