The economy is still struggling to make a full recovery and the unemployment rate is still sitting above 8%, but when it comes to the housing market, consumers are optimistic about the future, according to a semi-annual survey by real estate website Trulia.
The American Dream survey was conducted in May, and shows consumers are optimistic about the health of the housing market and that home prices will rise in the near future.
The survey was commissioned Harris Interactive and polled 2,205 homeowners and renters in May to get a sense of their attitude toward home ownership in light of the housing crash that led to the recession. Surprisingly, the results also showed more people are seriously considering buying a new home now compared to the last survey.
Big Homes Still in Demand
The 2008 financial crisis was brought on by easy access to home loans and homeowners over-leveraging their homes. And despite many consumers being forced to downsize to homes they can actually afford, the survey shows Americans still like their homes large.
Twenty-seven percent of respondents considered the ideal sized home as more than 2,600-square feet, an increase from 17% in the previous survey. People identifying a “super-sized” home of 3,200-square feet or larger as their preferred home size increased to 11% from 6% last year.
Homeowners looking to find a home of this size might have to start new construction. Current existing inventory on the market is smaller than respondents’ ideal size, according to Trulia. In fact, the website says the majority of homes currently on sale are between 800 and 2,000 square feet in size.
Size isn’t the only thing future homebuyers are after. According to the survey, 63% of buyers want a master bedroom, 56% seek a walk-in closet and 50% want to cook in a gourmet kitchen. But these amenities might be out of reach. According to the survey, only 26% reported having a master bath in their first home, 35% claimed having a walk in closet and only 9% had the gourmet kitchen in their first home.
A more realistic desire that many homebuyers yearn for is wood floors. According to the survey, 35% of buyers could check off wood floors in their first home.
The housing crash forced many homeowners to become renters, but the shift hasn’t tainted the dream of owning a home. Of those surveyed that are currently renting, a whopping 78% said they plan to buy a house, up from 72% in the early part of last year. Of those renters looking to buy, 27% want to do so in the next two years. The interest in buying can be attributed to low interest rates and depressed housing prices.
When it comes to buying, respondents seem more realistic about the cost of owning with 47% of wannabe homebuyers expressing concern about coming up with a down payment and 25% unsure if they would qualify for a mortgage.
Despite record foreclosures, a growing number of underwater homeowners, and short sales plaguing the market, consumers still expect home prices to increase. According to the survey, 61% think that home prices will increase in the next year and 58% think home prices will return to previous bubble level peaks during the next decade.