Many buyers and sellers remain cautious about buying and selling homes in today's market, but that's improving, albeit slowly, according to two new studies.
In a year's time, the number of Americans who said the sluggish economy scares them away from buying a home has been cut in half and more homeowners say it's a good time to sell.
Fewer buyers sitting on the fence
Low home prices and mortgage rates prompted 11 percent of those surveyed to say current economic conditions make it more likely they will buy a home, up from 8 percent two years ago.
"Two years ago, the economic situation was driving a lot of potential homebuyers to the sidelines," said Stephanie Rahlfs, an attorney and editor with FindLaw.com.
"Many factors influence housing decisions, including income, housing prices, proximity to work, job relocations, mortgage rates, ability to sell an existing home, schools, and so on.Â But it's clear that people's outlook on the economy is now becoming less of a drag on the housing market," Rahlfs said.
FindLaw.com found a "significant rise" among middle- and upper-income households saying the current economy is making them more likely to enter the housing market.
"This may be due to some combination of historically low mortgage rates, housing prices that - although rebounding - are still relatively low, and people perhaps feeling more optimistic about the economy in general," Rahlfs added.Â
More sellers coming to market
In a Redfin.com survey conducted Oct. 25 to Oct. 30, sellers were also more optimistic about the economy - 40 percent cited the economy as a major concern with selling, down from 49 percent in the third quarter.
Also, 15 percent believe it is a good time to sell, up slightly from 13 percent.
Redfin concedes the changes are small, but they represent a trend of sellers becoming more confident about getting top dollar for their homes for sale.
"These attitudes aren't changing dramatically from one quarter to the next, but the direction has been remarkably consistent among both buyers and sellers: the market is slowly tilting in sellers' favor," said Redfin CEO Glenn Kelman.
"At this point in the housing market, the only opinion that matters is that of the would-be sellers trying to decide whether to put their home on the market," Kelman added.
Sellers believe waiting out the market is still a good idea - 83 percent believe that they would get a higher price if they wait a year or two, up from 80 percent in the third quarter.
While they play the waiting game, 43 percent of homeowners are considering renting out their home rather than selling it, down from 46 percent.
The Redfin survey also found:
Thirty-one percent of sellers plan to price their home higher than nearby comparable sales, unchanged from last quarter.
Thirty-seven percent would choose an all-cash offer over higher offers with conventional or Federal Housing Administration (FHA) financing, up from 35 percent.