The U.S. home-selling sentiment is at an historic low now, with many potential sellers believing it is not a good time to sell a home, according to a study released on Tuesday by the U.S. Mortgage Bankers Association (MBA).
Given today’s low home prices and low mortgage interest rates, almost 80 percent of U.S. households believe that now is a good time to buy a home, said the study, entitled “The Great Recession and Attitudes Toward Homebuying” which was conducted by Prof. Gary V. Engelhardt at Syracuse University.
However, the sell-side of the housing market is dominated by deeply negative sentiment, as potential sellers are nearly unanimous in reporting that it is not a good time to sell a home, citing difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or on foreclosure, noted the study.
“In economic terms, as market values have fallen, potential sellers have not adjusted their price expectations downward fast enough to bring buyer and seller sentiment in line with one another,” said Engelhardt.
In the following five quarters, home-buying sentiment will keep around current and long-run average levels, but home-selling sentiment is expected to remain at historic low, suggesting that market activity will remain sluggish in the near term, according to the study.
“Our forecast suggests that home sales will remain low in 2012, but should pick up in 2013 and beyond as home prices begin to recover,” said Michael Fratantoni, vice president of research and economics at the MBA.