Millennials are Especially Wary of Market Fluctuations, According to the Latest ValueInsured Modern Homebuyer Survey

It appears that Americans are becoming more concerned about today’s home prices being over-inflated. They are becoming more concerned that a price correction is looming just on the horizon. This is born out in the latest homebuyer survey published by ValueInsured.

There are a couple of positive indicators for the current housing market.

  1. The prices continue to rise in most markets month-by-month.
  2. The inventory remains low. There is not enough housing to meet current demand which keeps housing moving in a positive direction.
  3. 79% of Americans believe that home ownership is important to the American Dream. The ValueInsured Housing Confidence Index score remains at 69.7 on a hundred point scale. This is up a single percentage point from April.

Is The Housing Market Overheated?

According to the survey the most Americans believe the market is overheated.

Concerns of over-inflated home prices rise while confidence that homes will hold value declines.

In spite of the fact that Americans remain committed to homeownership and the American Dream their confidence in buying now, and their expectations that home prices will be maintained is waning. According to the ValueInsured survey, 57% of American homeowners surveyed believe that homes in their area are overvalued and current prices are unsustainable. That segment, according to the survey, is up 7 points from last quarter. These fears are especially evident in urbanites with 65% of homeowners and homebuyers saying housing is overvalued and home prices are unsustainable.

Prospective homebuyers as a whole are also more wary. Sixty-three percent of all homebuyers and 72 percent of millennial homebuyers say they are concerned with timing the market and want to ensure they are “not buying high.” These new figures represent double-digit jumps from just three months ago.

Have home values really hit the ceiling?

A majority of homeowners think the peak is at least getting close. Fifty-eight percent of homeowners say that they expect there will be a “housing bubble and a price correction” in the next two years – up 12 percentage points since April.

Perhaps the most telling finding is that more than eight in 10 homeowners (83 percent) think now is a good time to sell, a 9-point jump from last quarter. Furthermore, only 43 percent of first-time homebuyers are confident that a home they buy today will gain value by the end of 2018.

States most worried about a price correction

Looking across the country, residents in hot housing states are particularly jittery. The top five states where residents believe the market is approaching a “housing bubble” include:

  1. Washington (71 percent)
  2. New York (68 percent)
  3. Florida (63 percent)
  4. California (59 percent)
  5. Texas (58 percent)

Market fluctuations are a key concern for millennials

While experts have long suggested living in a home for more than seven years could lower a homebuyer’s exposure to market fluctuations, only 37 percent of millennials in the survey plan to live in next home they buy for more than six years, making the so-called “rule of seven” less relevant to the next generation of serial homebuyers.

 “Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market,” said Melendez. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.”

Do you agree?

If you agree with the survey results provided by ValueInsured and feel now is a good time to sell you may want to see what your home’s value is today. You can get your personalized home valuation by entering your information below. Don’t wait for home values drop to take action. The housing market is much like the stock market. When the market declines and people start to sell the prices drop more quickly and one could easily find themselves in a difficult financial position. Get your FREE HOME VALUATION today!