American consumers are more confident about the economy now than last quarter. Yet, homebuyer confidence is at a two-year low. Buyer confidence dropped 4 percent from last quarter, according to National Association of Realtors' data.
Yet, three positive factors are expected to allay buyer concerns: wage growth along with tax cuts which may increase take-home pay, and job creation. Sellers, on the other hand, have growing confidence in the housing market. The share of homeowners who think now is a good time to sell their home is at 74 percent for quarter one 2018, near the 2017 peak of 75 percent. HousingWire reports that the share was 71 percent in the last quarter of 2017.
“The critical shortage of listings ... continues to spark a hike in home prices that is not easy for many buyers – especially first-time buyers – to overcome,” NAR Chief Economist Lawrence Yun said. “Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months. Many house hunters are telling Realtors that they are dispirited by the stiff competition for the short number of listings they can afford.” And now experts are saying this competition and rising home prices are only going to get worse as the spring home buying season kicks into full gear.
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