Many homeowners who have lingered on the sidelines for years are finally ready to stake a for sale sign in their yards, boding well for purchase activity for the remainder of the year. Sellers are encouraged by increased job and income growth, according to Fannie Mae’s most recent 2015 National Housing Survey.
The share of Americans surveyed who say now is a good time to sell reached a new high in the latest survey, increasing three percentage points to 52 percent. It’s the first time the metric had crossed the 50 percent threshold in the survey’s history.
The number of Americans who say they expect home rental prices to rise in the next 12 months also reached an all-time survey high, at 59 percent.
“With an increase in housing supply from those ready to sell, combined with higher rental cost expectations, more potential home buyers may be encouraged to leave the sidelines,” according to Fannie Mae’s survey.
The limited inventory of homes for sale that has plagued many markets has been putting upward pressure on home prices. It may also be signaling an increasing advantage to sellers. Also, renters are facing rising costs.
“Together, these results point to a healthier home purchase market, with more renters likely to find owning to be more cost-effective than renting and more sellers likely to put their homes on the market,” says Doug Duncan, senior vice president and chief economist at Fannie Mae.
The survey also found that the average price change expectation dropped to 2.6 percent for the next 12 months, and the number of survey respondents who believe home prices will rise in the next 12 months dropped to 47 percent.
At the same time, the share of respondents who say it’s a good time to buy a house dropped to 63 percent — tying a survey low — while those who say it’s a good time to sell rose to 52 percent — a new survey high.
There is one wildcard that could hinder the easing of inventory. Investors.
With the rental market still strong, large institutional investors are largely holding on to millions of single-family rental homes, one of their most valuable assets.
In the aftermath of the housing crisis, investors swarmed to buy up foreclosed single-family homes and turn them into rentals. Now, even years later, they’re refusing to let go and sell, viewing long-lasting potential with these properties.
The share of single-family rental homes has climbed 35 percent since 2006 — reaching 15.1 million from 11.2 million, according to John Burns Real Estate Consulting. About 3.9 million owner-occupied homes have turned into rentals since that time.