Real Estate

Chase: Home confidence levels reach four-year high

Survey reveals most think a home is still a great investment

Americans still believe homeownership is the best investment a person can make, according to the first Chase U.S. Housing Confidence Survey.

Chase Home Lending partnered with Pulsenomics to launch the Chase Housing Confidence Index, designed to gauge how Americans feel about the housing market.

The newly expanded HCI uses survey data from more than 15,500 American households to systematically measure and track key dimensions of consumer confidence in housing markets across the nation. The index measures homeowner and renter confidence on a 0-100 scale. Levels that reach above 50 indicate positive consumer readings.

The report shows record highs among U.S. homeowners and renters in three key measurement areas: their take on market conditions, aspirations for homeownership and expectations regarding home values and affordability.

“These record results were driven by healthy assessments of local real estate market conditions among existing homeowners, but even more so by surging expectations among renters,” Pulsenomic founder Terry Loebs said. “Seven in 10 renters now express confidence in their ability to afford a home someday, and nearly three-quarters of those with an opinion say that buying a home is the best long-term investment a person can make.”

Dallas, Denver and Las Vegas top the list as the cities with the highest levels of housing confidence. Notably, 80% of Dallas renters are confident they will own a home someday, while 70% plan to purchase in the next five years, according to the report.

A booming job market may be responsible for Dallas’ confidence rate. More than 60% of Dallas homeowners think it's a good time to sell, largely due to the abundance of home shoppers.

Nearly 75% of households in America think it is a good time to buy a home. Specifically, 17% of respondents think affordability makes it a bad time to purchase a home, whereas more than one-half of Southern and Midwestern respondents think otherwise.

“Affordability remains a top focus for buyers in the market today, but we are encouraged by the overwhelmingly positive outlook across the country,” Chief Marketing Officer for Chase Home Lending Amy Bonitatibus said. “We have found innovative ways to address some of the affordability concerns by tackling the main barriers to homeownership with education grants, as well as down payment, closing cost assistance and low down payment products. Our Home Lending advisors are helping customers create customized plans for reaching home buying goals.”

More than half of renters across the country want to buy a home in the next five years, and of those, 70% are Millennials. The highest responses came from the South, where 62% expect to buy in the next five years, and 33% want to purchase in the next two years, according to the index.

For many homebuyers, neighborhood features influence their home buying process.

Not surprisingly, 53% of renters believe neighborhood safety is the most important feature when buying a home. However, home and backyard size were the next top choices with 28% and 25%, respectively. Lastly, an urban or suburban setting is lower on the priority list, coming in at 9% and 15%, respectively.

The HCI indicates that 31% of Millennials are more concerned with work commutes, versus 10% of Millennials who believe an urban setting is the most important feature in their home and 11% think a suburban location mattered most.

Overall, the report suggests that renter homeownership aspiration and increasing home values led to a boost in national confidence.

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