Homebuyer Confidence Is on the Rise
A confluence of data presented by the New York Times on Sunday reveals a marginal boost in homebuyer confidence that is still well below pre-recession levels. Robert Shiller, a Yale economics professor, reported that a survey he and colleagues have conducted since 2003 showed respondents expecting an average 5.5% gain in their property value per year. That's up from a low of 4% in 2012 but a fraction of the 12.6% gain reported in 2004.
Shiller wrote that the Pulsenomics U.S. Housing Confidence Survey concluded similarly, with homeowners and renters expecting an average 4% annual gain over the next 10 years. Finally, a Chicago Mercantile Exchange report on US composite home price futures revealed a 4% per year increase between November 2014 and 2016. Shiller notes that corrected for inflation these expectations call for just 2 to 3.5% price gains, which should assuage those fearful of overconfidence leading to a bubble.