Rising mortgage rates feared most to trigger home value erosion

Rising mortgage rates feared most to trigger home value erosion

In the latest ValueInsured Modern Homebuyer Survey conducted in Summer 2018, 65% of all American homeowners believe the housing market is near its current cycle peak and 63% believe there will be a price correction in their area within two years – the highest levels recorded for both measures since the inception of the quarterly national survey in Spring 2016.

Given that similar correction concerns have been reported recently by The Washington Post, CNBC, Bloomberg, and Forbes, among many others, this declining homeowner confidence in home value sustainability is not news. What has not been examined more closely, however, are the potential catalysts for the pending correction.

CNBC: Record low numbers of millennials think buying a home is a good investment—here's why

CNBC: Record low numbers of millennials think buying a home is a good investment—here's why

America's attitude towards home-ownership is changing. Only 48 percent of millennials (age 21-36) believe that buying a home is a good investment, according to the latest ValueInsured Modern Homebuyer Survey. That's a record low, according to the report, and a sharp contrast to the previous high of 77 percent just two years ago.

Millennial homeowners and the starter-home drought

Millennial homeowners and the starter-home drought

In ValueInsured’s latest Modern Homebuyer Survey, millennial homeowners reported concerns for housing overvaluation, and rising pessimism for home price futures. One would expect millennial homeowners – being in the enviable position of owning in this seller’s market – to rejoice at rising home prices, but their reported sentiments tell an opposite story. Any rise in their home equity wealth on paper is negated by their concern for a pending correction, and the worries that they could be “buying high” if they were to upgrade now. The result? inventory shortage particularly for starter homes.

Consumer Affairs: Federal Reserve reports consumers taking on more debt

Consumer Affairs: Federal Reserve reports consumers taking on more debt

"Wealth in 2016 of the median family headed by someone born in the 1980s remained 34 percent below the level we predicted based on the experience of earlier generations at the same age," the authors write. "The corresponding shortfalls of the 1960s cohort (–11 percent as of 2016) and the 1970s cohort (–18 percent) are worrying but are much smaller than their respective 2010 and 2013 shortfalls."

The study found that the typical millennial family lost ground between 2010 and 2016, falling even further behind the typical wealth life cycle. The authors say this represents a missed opportunity because asset appreciation is unlikely to be as rapid in the near future as it was during the recent period.

Perhaps because of this trend, millennials’ view of buying a home has turned negative, according to a survey by ValueInsured. In the third quarter of this year, only 48 percent of all millennials said buying a home in America today is a good investment, a record low.

That's down from 54 percent in the second quarter. The previous high was 77 percent two years ago.

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Millennials’ View of Home Buying Turns Negative

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Millennials’ View of Home Buying Turns Negative

Millennials’ housing confidence and enthusiasm plummet to record low in latest ValueInsured Modern Homebuyer Survey

​​​​​​​DALLAS, August 15, 2018 – Millennials’ perceived value in buying a home dropped below 50 percent, down significantly from post-Brexit high, according to the latest ValueInsured quarterly Modern Homebuyer Survey

Americans tour 7.4 homes before buying

Americans tour 7.4 homes before buying

“The first one I saw and I knew it was the one…” may be a line you would hear in a movie, but it is unlikely how a homeowner would describe his or her home buying experience, and certainly not in 2018.

In this competitive housing market where homebuyers are accustomed to compromises and disappointments, most buyers need to tour over a half dozen homes – often after viewing many more online – before finding the right one, according to latest findings in ValueInsured’s Q2 2018 Modern Homebuyer Survey.

6 in 10 homeowners did not enjoy home buying experience

6 in 10 homeowners did not enjoy home buying experience

We know this is true: Americans have a strong desire to become homeowners (79% among non-homeowners, according to the latest ValueInsured Modern Homebuyer Survey) and the next generation continues to view homeownership as an important part of their American Dream (78% among millennials). However, increasing evidence shows they may not enjoy the process of actually buying a home.

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