Americans Eager to Buy, Sellers Aren’t Happy?
December 21, 2011
Nearly 80 percent of home buyers say now is a great time to buy a home, but sellers say it’s not a great time to sell, according to a new study, “The Great Recession and Attitudes Toward Homebuying,” released this week by the Mortgage Bankers Association. In fact, homeselling sentiment has fallen to record lows.
As for home buyers, they certainly have plenty to be happy about -- housing prices have fallen and interest rates are at record lows, pushing affordability to record levels and allowing buyers to snag great deals on housing.
But sellers, on the other hand, are getting discouraged that they can’t find buyers for their homes at a desirable sales price as well as the large overhang of mortgages past due or in foreclosure, according to the report.
"In economic terms, as market values have fallen, potential sellers have not adjusted their price expectations downward fast enough to bring buyer and seller sentiment in line with one another," Gary Engelhardt, a professor at Syracuse University who authored the study, said in a statement.
Sellers still can’t accept that their home values have fallen and they are no longer able to get the prices from the past, according to the study.
Meanwhile, “despite high unemployment and slow economic growth, the bulk of American households believe that now is a good time to buy a home,” Engelhardt said. The strongest positive sentiments toward buying was found among young, educated, white, and Hispanic households, according to the study.
“The pattern of home-buying sentiment during the current recession looks very similar to that of past recessions,” Engelhardt notes. “Home buyer sentiment falls as the unemployment rate increases, and improves as job growth returns and housing becomes more affordable. What distinguishes the current recession, though, is the dramatic decline in home-selling sentiment. From 1992 through 2005, positive home-selling sentiment fluctuated between 40 and 60 percent. Since 2005, sentiment has dropped precipitously, to around 7 percent currently, even while home-buying sentiment remains high.”
Source: “The Great Recession and Attitudes Toward Homebuying,” Mortgage Bankers Association (December 2011)
Updated: December 02, 2020