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26 CURRENT HOME SELLERS CONCERNED ABOUT FINANCING AVAILABILITY, INVENTORY While homeowners are feeling more confi- dent about the prospect of selling their homes, they do harbor concerns regarding the avail- ability of home financing and the low inventory available for their next purchases, according to the Redfin Real-Time Seller Survey. About 38 percent of home sellers say now is a good time to sell a home, according to the Redfin survey conducted in the first quarter of the year. is is up from 34 percent in the previous quarter and up significantly from 22 percent a year ago. Denver Redfin agent Paul Stone captures survey-takers' sentiment, saying, "Most of my home-selling clients worry the most about what will happen after they sell." "With so much competition in the market, they fear they will have to move in with their in-laws if they can't find their next home quickly," he added. In fact, the top two concerns for home sellers in the first quarter were the low inventory of homes available for their next home purchases and the financing environment, which might preclude potential buyers from being able to purchase their homes. Low inventory was also a top concern in the previous quarter, cited among 30 percent of respondents; but concern about buyer financ- ing is up 5 percentage points from the previous quarter. "ese concerns likely reflect higher prices and mortgage rates, which have harmed affordability, and stricter lending regulations that went into effect in January and could impact some buyers' ability to get a loan," stated Redfin analyst Ellen Haberle. Redfin added a new category to its survey, "competition for next home," which was marked as a concern among 27 percent of survey respondents. While sellers have increased their concerns regarding financing, they are substantially less concerned with the overall economy. In the fourth quarter, 39 percent of survey respondents cited "general economic conditions" as a concern. In the first quarter, just 26 percent reflected this concern. Mortgage rates played at least a partial role in more than half of current home sellers' decisions to list their homes for sale, accord- ing to the Redfin survey. Fifty-two percent of sellers said mortgage rates were a factor in their decision. More sellers plan to upgrade to a larger or nicer home than to downsize or move to a differ- ent location. Forty-four percent of sellers plan to upgrade after selling their current home, whereas 29 percent plan to move to a new location, and 16 percent plan to downsize, according to Redfin. Redfin surveyed 466 homeowners in 22 met- ros across the country for its quarterly survey. CONSUMER OPTIMISM DECLINES AS UNCERTAINTY LINGERS Despite improvements to personal financ- es, consumer sentiment moved downward in January, according to one of the leading measures. e Surveys of Consumers' Index of Consumer Sentiment, released jointly by omson Reuters and the University of Michigan's Survey Research Center, dropped to 81.2 in January from December's 82.5. Compared to a year ago, January's survey was up an even 10 percent from 73.8. e monthly decline stands in contrast to the Conference Board's Consumer Confidence Index, which rose for the second straight month in the group's most recent report. According to Surveys of Consumers, re- spondents judged their recent financial prog- ress in January more favorably than any other time in the past six months. When asked to explain how their finances had changed, in- come increases were mentioned by the highest proportion of consumers since late 2007. At the same time, however, only one in four households in the January survey reported being better off financially than they were five years ago, and half said they expect no income increase in the year ahead. "Despite the recent economic gains, consumers' outlook for their finances as well as the national economy over the longer term have remained more resistant to improvement than in past recoveries," said Richard Curtin, chief economist for Surveys of Consumers. "is deeply rooted uncertainty about future economic conditions was first sparked by the Great Recession," Curtin added, and it "has been sustained by the growing recogni- tion that no federal policy has yet emerged that will restore long-term economic prosper- ity anytime soon." e index's measure of consumer perceptions about current conditions was down slightly to 96.8, outperforming last year's reading by 13.9 percent—largely due to improved job prospects as the economy continues to march on. e expectations index, meanwhile, was down to 71.2 (6.9 percent higher than of last year), with strained budgets and slow improvements in home values expected.

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