Millennials, baby boomers label housing market as favorable

Despite existing-home sales dropping for the first time in nearly a year last month, both current and potential homeowners are consistently optimistic about the housing market.

Berkshire Hathaway HomeServices’ Homeowner Sentiment Survey showed that thanks to higher home values, increasing housing inventory and low interest rates, consumers are feeling positive about the real estate market. Two-thirds of current homeowners view the national housing market favorably, a 5-percentage point gain since spring, and the highest level its hit in over a year.

The survey also found that baby boomers, who had been the least optimistic generation about the housing industry, have seen a jump in believing the housing market is favorable. Sixty percent of baby boomers find the housing market favorably, 72 percent said thanks to interest rates. However, millennials are the most optimistic generation. More than three quarters find the housing market favorably, and 85 percent believe that homeownership is part of the “American Dream,” the survey found.

“We find this data particularly interesting in light of the housing-inventory shortage seen in many markets,” said Gino Blefari, CEO of Berkshire Hathaway HomeServices. “As homeowners feel increasingly confident about the outlook of housing and their homeownership investments, they are more likely to consider a move for themselves – up, down or laterally to another market. Perhaps this is a signal that more existing homes may gradually come to market freeing up more options for first-time and move-up buyers.”

While mortgage rates are still low, most millennials described them as average, and millennials admitted to struggling to find a low mortgage rate. Generation X members cite saving money for a purchase as their biggest hurdle to homebuying, while baby boomers said they struggle to find a home that fits their family’s lifestyle.

Across generations, there is worry about the potential rising mortgage rates, as 81 percent expressed concern. “Mortgage rates have been low for so long it’s only reasonable for rates to rise a little at some point down the road,” said Stephen Phillips, president of Berkshire Hathaway HomeServices. “If and when rates do rise, it’s also reasonable to expect only a gradual increase over time, no rate shock.”