Here we go. Americans are showing more desire to buy homes. In fact, the American dream is more alive than it has been in years - it's reached a three-year high with 79 percent of U.S. residents saying that owning a home is an essential part of that all-American dream.
Now, more Americans, once again, say it's better to own than rent. In the same survey by CNBC-All-America Economic Survey, the figure shot up to 69 percent. This same group of Americans also have more faith in a long-term investment in real estate over stocks (even though the stock market is hot right now).
This all points to rapidly growing consumer confidence in a once sickly real estate market. First-time buyers are coming out this spring and making an increase in the real estate traffic market. They're turning out to check out homes and showing more encouraging signs of interest in buying. Investor interest in homes is also on the rise. It's at a four-month high and sales of distressed properties are also increasing.
When investors come into a marketplace, they typically pay all cash for the properties and can cause an area to rapidly increase in pricing. With more competition from investors, first-time homebuyers struggle to gain access to the real estate market. But as long as properties still return good cash flow for rents, there will continue to be great interest from investors.
According to Lender Processing Services, right now the number of distressed homes is dropping but there are still slightly more than 5 million homes that are either delinquent or in the midst of a foreclosure process. To compete with the house-buying market, developers are increasing multi-family housing construction to bring a new supply of rental apartment buildings.
Of course, as time goes on, the signs of the aftermath of the housing crash will continue to evolve. What this may mean to buyers is that timing, preparation, and action are more critical now than they have been in a long time.
All this positive attention on the real estate market has some experts cautioning that we might be heading toward another real estate bubble. But still other experts say that a need for housing starts, increase in consumer confidence, and still very low mortgage rates are the early signs of a housing recovery. However, these experts caution that, even with buyer confidence returning, the housing market will continue its recovery over a period of several years. This won't be a fast process, experts say.
It's expected that as the market continues to recover, the long-term need will be for 1.6 million to 1.9 million new homes per year. And since inventory is low in housing, that means that builders are gearing up for more production. That has consumers and economists confident that there's, at least, some positive signs that housing is on the mend.